Belmont Club

"The pen is mightier than the sword"

Because it can sign a check. Asymmetric warfare has never been more dangerous. Russia has confirmed plans to supply Syria with supersonic, antiship cruise missiles, according to the Ria Novosti, “despite efforts by Israel and the United States to stop the deal.”

Israeli authorities have expressed a strong concern over the increase of Syrian defensive potential, as well as over a threat of transferring weapons to Lebanese or Palestinian radicals. Washington also said the deal could destabilize the region.

About 72 missiles are likely to be provided, together with associated coastal defense systems. The Yakhont missiles could provide the Hezbollah with the capability to hit another vessel, as they did with INS Hanit. But the potential of supersonic cruise missiles against naval vessels may be dwarfed by information weapons — and checks.

Information weapons have demonstrated the potential to destabilize whole countries or bring down entire systems. The Stuxnet worm may have brought the Iranian nuclear weapons program to a temporary halt. A recent wave of unrest in the Middle East triggered or at least abetted by social media applications like Facebook and Twitter is sweeping the region. Even seemingly harmless things can be potentially powerful tools.   Wired reports that Libyan rebels are coordinating their activity through an Arabic language dating site, using such aliases as “Girl of the Desert” and “Sweet Butterfly”.

Recently, a Pentagon-contracted report authored by Kevin D. Freeman contends that the 2008 economic meltdown was at least partially triggered by economic warfare by actors unknown, hiding behind the walls of financial disclosure laws. “Suspects include financial enemies in Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. Chinese military officials publicly have suggested using economic warfare against the U.S.,” the Washington Times reports.  According to Freeman, the attack came in waves, like Nagumo’s carrier planes on the sleeping ships at Pearl Harbor

The first phase of the economic attack, the report said, was the escalation of oil prices by speculators from 2007 to mid-2008 that coincided with the housing finance crisis.

In the second phase, the stock market collapsed by what the report called a “bear raid” from unidentified sources on Bear Stearns, Lehman Brothers and other Wall Street firms.

“This produced a complete collapse in credit availability and almost started a global depression,” Mr. Freeman said.

The third phase is what Mr. Freeman states in the report was the main source of the economic system’s vulnerability. “We have taken on massive public debt as the government was the only party who could access capital markets in late 2008 and early 2009,” he said, placing the U.S. dollar’s global reserve currency status at grave risk.

“This is the ‘end game’ if the goal is to destroy America,” Mr. Freeman said, noting that in his view China’s military “has been advocating the potential for an economic attack on the U.S. for 12 years or longer as evidenced by the publication of the book Unrestricted Warfare in 1999.” …

In a section of who was behind the collapse, the report says determining the actors is difficult because of banking and financial trading secrecy.

“The reality of the situation today is that foreign-based hedge funds perpetrating bear raid strategies could do so virtually unmonitored and unregulated on behalf of enemies of the United States,” the report says.

“This is the equivalent of box cutters on an airplane,” Mr. Freeman said. However, a Yale professor said there is no convincing evidence for the hypothesis which cannot be explained by ordinary financial mismanagement.  Nor were the Pentagon, Treasury or intelligence agencies eager to look under this rock, seeing the subject as something outside of their normal operating sphere. The Washington Times claims that Michael Vickers, a nominee for the position of Undersecretary of Defense for Intelligence, blocked further inquiry into the economic warfare topic, but a spokesman for Vickers denied it.

Yet there is no reason why both the Yale professor and Freeman might not be equally correct. Mismanagement could be entirely responsible for the US economic debacle. But any information attack on US financial systems would probably aim to magnify the effects of mismanagement, amplifying dysfunctional trends already in place so that they became runaway processes.  Economic warfare and mismanagement are not mutual exclusives.

There is no doubt that foreign actors and political groups are deeply interested in the information architecture of the world. They realize its potential, even if departments find that it falls between the cracks.  Take the Internet.  The Washington Post reports that the Obama Administration may now be sympathetic to restricting the Internet in order to prevent the destabilization of foreign regimes.

The California nonprofit organization that operates the Internet’s levers has always been a target for such global heavies as Russia and China that prefer the United Nations to be in charge of the Web. But these days, the Internet Corporation for Assigned Names and Numbers is fending off attacks from a seemingly unlikely source: the Obama administration. …

When the ITU, a 145-year-old agency of nearly 200 nations and territories, held its annual meeting in October in Mexico, a Syrian emissary representing Arab states raged against ICANN as if it were an enemy nation.

“Do not surrender to the ICANN!” Nabil Kisrawi yelled during one of the conference’s sessions, according to a story in the Register, an online publication on Internet governance. “There is even a representative of the ICANN in this room!” Kisrawi said. (Kisrawi recently died.)

Other nations have been mobilizing against ICANN. China, which monitors dissident activity on the Web, has been leading a campaign among dozens of developing nations to lobby the U.N. for oversight over ICANN, according to former and current ICANN officials. And a coalition of former Soviet states led by a Russian minister has been pushing the U.N. to obtain veto power over ICANN.

The ICANN brouhaha underscores one of the key hilltops of information warfare: control over regulations. “Lawfare” creates the context of information combat. It defines what systems may lictly do, or not do, what may be detected or kept secret. Laws and regulations can be changed by influencing the policymakers who enact them.  The “Obama Administration” does not exist in the abstract. It always consists of someone, some collection of individuals.

And in that respect, foreign powers have acquired an increasingly powerful voice in Washington, where special interests and lobbies very often veto the mandate of the voters. If the dictators and the public sector unions, for example, write the laws, then the confluence between “lawfare” and information warfare becomes immediate.Slate described how Muhammer Khadaffi became one of the most influential men in the UK through the simple application of influence.

Photographs of his British friends and business partners cluster in a circle around him: Nat Rothschild, scion of the banking family, who gave a party for Saif when he completed his doctorate on “civil society” and “global governance” at the London School of Economics; Sir Howard Davies, director of the LSE and one of Tony Blair’s economic envoys to Libya; Lord Peter Mandelson, a former Blair adviser, Cabinet minister, and European commissioner, who now advises “companies hoping to expand markets overseas”; Prince Andrew, who promotes British trade abroad; and, last but not least, Blair himself.

Saif was popular. He went to parties in St. James’s Palace and sailed in yachts off Corfu. He was also rich. Thanks to his contacts, he became the conduit through which British companies invested in Libya—and through which the Libyan Investment Authority invested in British companies. At least that was what he was doing until last week, when he appeared on Libyan television vowing that his father’s bloody regime would fight “to the last man, the last woman, the last bullet.” Suddenly, the acceptable face of Libyan tyranny became unacceptable. Underneath that Western-educated veneer, it seems there had lurked a ranting psychopath. …

Money, even foreign money (and particularly that Saudi money), has always been able to buy access to Western statesmen. But in the last decade or so, the proportions have subtly shifted. The democratic West has become relatively poorer, while a clutch of undemocratic “emerging” markets have become richer. To put it more bluntly, Western politicians, ex-politicians, and even aristocrats have become much, much poorer than the very, very rich businessmen emerging from the oil-and-gas states of Central Asia, Eastern Europe, and the Middle East. Twenty years ago, no retired British or German statesman would have looked outside his country for employment. Nowadays, Blair advises the governments of Kuwait and the United Arab Emirates, among others; Gerhard Schröder, the former German chancellor, collects a paycheck from Gazprom, the Russian energy behemoth.

What happens when dictators with billions suddenly realize that bureaucrats in First World countries make mere hundreds of thousands of dollars? What can take place in a world where foreign dictators can hire ex-Presidents and heads of Central Banks as consultants, and who can then influence how information may flow in the modern market? What happens is that they can make Yakhont missiles seem like tinkertoys. Whatever one may think of the Freeman report, events in the Middle East have demonstrated the power of information to destabilize whole regimes. Nothing in principle suggests that the West is immune. If the Washington Times is correct, then neither intelligence agencies, the Department of Defense, nor Treasury is interested in going inside that door. But the danger is always that maybe some individuals inside of these bureaucracies may be deeply interested, for reasons of their own.


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