Belmont Club

The End of Innocence

Bruce Schneier, who writes prolifically on computer security issues, argues on CNN that revelations about NSA data mining programs prove that ‘resistance is futile’. He cites the case of two individuals, manifestly more computer savvy than the average Joe, who were ultimately unable to escape the toils of the FBI.

Hector Monsegur, one of the leaders of the LulzSac hacker movement, was identified and arrested last year by the FBI. Although he practiced good computer security and used an anonymous relay service to protect his identity, he slipped up. …Paula Broadwell,who had an affair with CIA director David Petraeus, similarly took extensive precautions to hide her identity. She never logged in to her anonymous e-mail service from her home network. Instead, she used hotel and other public networks when she e-mailed him. The FBI correlated hotel registration data from several different hotels — and hers was the common name…

Schneier concludes, “Welcome to an Internet without privacy, and we’ve ended up here with hardly a fight.”

Well I wouldn’t say that.

Governments have been fighting over the information owned by civilians for a long time. China has been engaged in reading data and metadata (which Drudge intentionally misspells as “megadata”) for a long time. The Financial Times  has just described a 21st century instance of war. It’s no longer conducted by sweaty armies marching on leather boots. It’s done virtually.  Think about it. The President of the US just met with the President of China, not to talk about ships, artillery or planes. They were talking about bits.

Beijing is engaged in systematic cyber spying on the US military and private businesses to acquire technology to boost military modernization and strengthen its capacity in any regional crisis, according to the Pentagon. …

In its report, the Pentagon paints a picture of a formidable and highly organised adversary which is using multiple methods to acquire technology, ranging from state businesses to students to old-fashioned human espionage.

“China continues to leverage foreign investments, commercial joint ventures, academic exchanges, the experience of repatriated Chinese students and researchers, and state-sponsored industrial and technical espionage to increase the level of technologies and expertise available to support military research, development, and acquisition,” the report says.

Like a old-time striptease show we see a little more with each wave of the fan. The next big revelation is probably going to be about financial wiretapping. PBS says “Obama Defends NSA’s Surveillance of Phone, Web and Credit Card Use”. Well why not? It’s a very short distance from “you didn’t build that” to “you don’t own that”. In fact they are equivalent statements. But whether there will be anything left to own after the vultures have their way is another question.

The world economy depends to a very great extent on information. And our great leaders are doing everything they can to make us mistrust it. As every applications developer and network professional understands, information flows demand some level of trust.  That is why billions of dollars are invested on security systems. A currency is largely about trust. Proven insecurity will certainly undermine a financial institution or communications system, as Michael Bloomberg learned.

A multibillionaire, dissatisfied with being just a business tycoon, starts a media division, brands it with his name and starts to gobble up competition and talent. Then he decides to run for office …

Meanwhile, it appears that his news company, like him, doesn’t like to adhere to the rules of the road. It turns out they have been using the terminals named after the billionaire and that made his fortune to peep and pry into the personal activities of important clients, including the nation’s biggest banks and even top government officials.

But this isn’t happening in a foreign country, it’s a homegrown embarrassment by American oligarch Michael Bloomberg.

Michael Bloomberg is now worried the market will punish him, because it will. Bloomberg’s predicament creates a competitive opportunity for rivals who can demonstrate they are more secure than Bloomberg’s service. Glenn Derene of Popular Mechanics writes that the Federal Government’s surveillance efforts will manifestly affect US tech companies.

Think for a second about just how the U.S. economy has changed in the last 40 years. While a large percentage of our economy is still based in manufacturing, some of the most ascendant U.S. companies since the 1970s have been in the information technology sector. Companies such as Microsoft, Apple, and Google are major exporters of information services (if you can think of such a thing as “exportable”) through products such as Gmail, iCloud, Exchange, and Azure. Hundreds of millions of people use these services worldwide, and it has just been revealed to everybody outside the U.S. that our government reserves the right to look into their communications whenever it wants.

If you lived in Japan, India, Australia, Mexico, or Brazil, and you used Gmail, or synced your photos through iCloud, or chatted via Skype, how would you feel about that? Let’s say you ran a business in those countries that relied upon information services from a U.S. company. Don’t these revelations make using such a service a business liability? In fact, doesn’t this news make it a national security risk for pretty much any other country to use information services from companies based in the U.S.? How should we expect the rest of the world to react?

Here’s a pretty good guess: Other countries will start routing around the U.S. information economy by developing, or even mandating, their own competing services. In 2000, the European Union worked out a series of “Safe Harbor” regulations mandating privacy protection standards for companies storing E.U. citizens’ data on servers outside of the E.U. For U.S. companies, that means applying stronger privacy protection for European data than for our own citizens’ data. And now there is considerable reason to believe that Prism violated our Safe Harbor agreements with the E.U.

Has it come to this? Are we really willing to let the fear of terrorism threaten one of the most important sectors of the U.S. economy?

The answer to is “yes” as in “yes we can”. But no one else seems to have learned the lesson. Question: what do you do after spending millions of developer manhours to secure a system? Why you build a backdoor. And then maybe the Chinese come along and … On the eve of Pearl Harbor the commanders worried that saboteurs were going to blow up the army’s P-40s. So to prevent that they were all ordered parked in the middle of the runway where no saboteur could possible get them.

The NSA leaker is actually a contractor who is in Hong Kong. A surveillance task had been outsourced. What could go wrong?  Even if the administration proved the leaker was working for the other side it would prove the point.

“We Can’t Spy . . . If We Can’t Buy!” the article said. Right and if you can Buy then you can Spy.

I think Derene is wrong about ascribing consumer of surveillance fears to counterterrorism efforts. Publics will accept a certain amount of intrusion as part of the price of good governance. If the public believed that Obama administration were only accessing records of terrorists pursuant to a court order, or that adequate due process protected privacy, few would mind.

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What consumers are scared of is politics. What they are really terrified of is caprice; the possibility they will be punished or harassed, not for being enemies of the law, but enemies of Obama. That they will be found guilty as charged of holding a political opinion or subscribing to an innocent belief that is out of fashion with the powers that be.

Companies and users have long factored in the known risks of engaging in criminal activity. They understand that criminal behavior carries risks. But now the consumers and service providers must live with the risk of ‘unknown unknown’;  secret courts, guided by secret jurisprudence and executing secret actions. If the message of the administration is that privacy is ‘no big deal’ it will find that nobody who wants to tax the information economy can be so cavalier.

One can only imagine the results of lawsuits related to the European “Safe Harbor Law”, which ostensibly “sets comparatively strict privacy protections for EU citizens. It prohibits European firms from transferring personal data to overseas jurisdictions with weaker privacy laws, but creates exceptions where the foreign recipients have voluntarily agreed to meet EU standards under the Directive’s Safe Harbor Principles.” Especially when the Europeans learn the “Safe Harbor” law is actually spelled Information Roach Motel.

Information technology, like nuclear weapons, will never be uninvented.  The best anyone can hope for it is to put it under control. Harry Truman had the wit not to point nuclear weapons at anyone randomly. Our better educated leaders have lost the knack. If we wish to enjoy the enormous benefits of information technology, it is necessary to bring it under control. To restore it to its legitimate uses. And as for those who have undermined its legitimacy, well they have lost theirs and one hopes the political process will reflect this.

Finance was virtualized by Richard Nixon’s decision to go off the Gold Standard. Warfare was largely virtualized by the nuclear age. Now legitimacy is being virtualized by the narrative. To a degree never before since Genesis, “in the beginning there was the Word and the Word has 64 bits”. To survive in that virtual age, average citizens are going to learn that the 4th Amendment is really the equivalent of the 2nd Amendment; and that encryption, private networks and the limits of government power over such things are the price of liberty.

Obama promised to usher in the age of idealism. Ironically he rang down the curtain on innocence. But maybe he was never that; for how would we know the truth in a wilderness of mirrors?

Time it was, and what a time it was, it was
A time of innocence, a time of confidences
Long ago, it must be, I have a photograph
It’s still unphotoshopped, they’re all that’s left you

The Three Conjectures at Amazon Kindle for $1.99

Storming the Castle at Amazon Kindle for $3.99

No Way In at Amazon Kindle $8.95, print $9.99

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