Saturday, December 20, 2008

PC Security

A little history is in order here. I have had the opportunity to watch the Internet grow from the early days in 1992. I got my first email address that year with a BBS (Bulletin Board System) called the 0x0 Republic. Some of you are old enough to remember those days of the BBS, Compuserve and the 14.4k Modem.

Back then, I had a humble Amiga 500 and 3000 computer. No, it didn't run DOS, it ran the AmigaOS. As you can see from the screen shot for the Amiga 500, this didn't run Windows, either. The AmigaOS drew it's roots from Unix allowing for command line and GUI operation (windows and icons) of the computer. Their user interface was very advanced compared to the Mac and the PC at the time. Unfortunately, through their own management errors, the company eventually went into bankruptcy.

Around that time, computer security wasn't really an issue. Most personal computers were still single user, general purpose computers and apparently, only a few people bothered to write a virus for the Amiga.

Eventually I got an Apple PowerBook 140b. It was with this computer that I first got a taste of the World Wide Web around 1994-5. It was a slow, stodgy, black and white experience. But I used it to do my research at the time. Back then, Alta Vista was the search engine of choice and they were considered to be the fastest search engine of the time.

And then I got a Windows laptop in 1997. When I first saw the software available for Windows, I laughed and realized what I had been missing on the Mac. I found a nice dialup ISP to work with, too. From there, I started to really get a sense of what could be found on the Internet. For years, I went without antivirus, not completely oblivious to the dangers - but just being careful not to open attachments from strangers.

In 1999, I got a computer with Windows 2000 Professional. And then I moved into a place with cable access to the Internet. I went from a 56k modem to 1.5 Mbs in speed. I had taken some classes on Windows and learned something about the security built into it. I started to read the tech news every day and noticed that more and more, viruses and trojans were making the news. So I got some Antivirus software.

I started out with Norton Antivirus and eventually moved on to Eset's NOD32. I also figured out something that my Dad taught me in terms of strategy: no defense can anticipate all attacks. So I found a good combination of tools along the way. This combination is what I'd like to share with you. It is built from years of experience and through about 12 years of running Windows. Because of this training, learning and vigilance, I've only had to rebuild a computer once due to a virus.

Keep in mind also, that no software can stop you from doing something stupid. If you open an infected attachment, from someone you don't know, you're only asking for trouble. If you click on a link in a spam message that takes you to a site harbouring malicious software, you're likely to be toast, even with the best defense available. Such a site is just waiting for you.

First and foremost, if you're running Windows, you're likely to be running as an administrator. An administrator account can do *anything* to your computer, and that includes damaging it. On the other hand, you can also use a "limited" account. This is a regular user account that can do very little, if any damage to the computer. To put it simply, admin accounts should only be used for maintenance, upgrades and software installation/removal. Limited user accounts should be used for everything else. A limited user should only be used for your daily computing tasks: Internet access, email, writing correspondence, playing games, etc.

When you start Windows up for the first time, you're prompted to provide at least one user name and additional names for other people who might use the computer. Windows XP doesn't give you much of an explanation for the differences in user accounts, either. So, unless you're informed, you create one or more admin accounts to use on your computer.

As a rule, you should never be running as admin unless you need to install a printer, software, remove software and the like. For anything else, run as a limited user.

The reason for this is simple. Many of the latest viruses and trojans install on your computer silently. Virus writers realize that most people will trash emails with attachments from people they don't know. So they use stealth. When your computer is being attacked, you will get no clue that new software is being installed - when you are running as an admin. Windows Vista can help this in some ways, but Vista also has a very similar programming philosophy to XP: convenience over safety. Yes, you can still get warnings that a software is trying to install, but a determined piece of malware can work around that and trash your computer. You won't really notice much other than your computer is running a bit slower than before. Malware tends to change the computer for its own benefit at the expense of other functions.

Now if you're running as a non-admin or limited user, and you click on a drive by download, you're going to get a message indicating that you do not have permissions to install this software - please contact your administrator! If, at this point, you were not planning on installing any new software, it's time to leave, quietly and never come back to that site. Ever.

So, if you have not done so already, create another admin account. Give it a password. Take the account that you're using now and turn it into a limited account. Whenever you need to add something to the computer or to do maintenance, log in to your admin account. For everything else, it's Visa, er, Vista, I mean...um...your limited account.

So that's the first step. Just changing the type of account you use for daily computing is a big step towards preventing infection from a virus or trojan.

Windows Update. Whatever you do, once a week, run it. Yes, they do make mistakes once in a blue moon, but I've never had any problems with their updates. Most malware is designed by reverse engineering the latest updates to find the security holes and then attacking there. Running updates for Windows on a regular basis, (and any other operating system for that matter) will further limit your chances of infection.

And now for antivirus. This is part of what is known as the Windows Tax. You pay for the license and then you pay for the antivirus and other security software. Most good antivirus suites are going to cost $40-60 for the first year, and 20-30 bucks thereafter for maintenance. The best antivirus will do a complete update of signatures without admin intervention. I heartily recommend Eset's NOD32 simply because the updates occur Automatically without you being an logged in as admin. Version upgrades will require admin access, but that is a fairly rare occurrence (once or twice a year).

I don't recommend Norton for a couple of reasons: they are a big, fat, complacent company with a huge market share. Try getting a hold of customer service there. On the other hand, Eset is hungry for your business. I can easily get a hold of their techs without cycling through their music on hold playlist.

Yes, there are others to consider, such as the free version from AVG. But you do, in a sense, get what you pay for. Caveat Emptor.

Remember what I said about how no defense can anticipate all attacks? Well, even NOD32 isn't perfect. So I strongly recommend antispyware as well. SuperAntiSpyware or AdAware are both great products that can find a lot of stuff just, you know, hanging around waiting for an innocent click to come by. They make a good complement to your antivirus software. It's worth noting here, that a fellow IT guy told me the following: Eset (NOD32) recommended SuperAntiSpyware as a complement to their own product. They acknowledged that their product won't catch *everything*. That is a very humble and honest statement to make, and heartening for me to hear. I've had similar experiences first-hand myself, so it's nice to hear it from someone else. That is why I like Eset.

So, we've covered the user accounts, the antivirus and the antispyware. You're also going to want a firewall. This is useful for software that is trying to call home, you know, to the Mother Ship. I have experience with two products for this purpose: ZoneAlarm and Eset's Security Suite w/NOD32. They are both highly recommended with full acknowledgement of other products out there.

They both provide security for those loose cannons known as "open ports". You can learn something about this, here. Gibson Research Corporation has helped me to understand the open ports issue and inspired me to try ZoneAlarm. Personal firewalls allow you to see when software is trying to call home and gives you a chance to block transmission of sensitive information to the Mother Ship!

There's another kind of firewall known as a router. You will know this as a device that allows you to share the Internet connection with more than one computer. Common brand names for routers include Linksys, Netgear, and D-Link. These are all top brands and they all provide an extra level of security. But that security only works if you enable it and configure it properly.

All routers require some form of administration to enable security. Nowadays, all consumer routers come with a CD you can run to walk you through the steps of configuring the router. This is especially important if you're using a wireless router. On any router, you want to make sure that remote administration of the router is disabled - this is usually the default setting. You will also want to reset the admin password which is "admin" usually, by default. If you do not reset the password, someone else can do it for you, as well as reconfigure the router to their liking rather than yours. Check the CD and the online manual for your router for details.

If you're using a wireless router, you must also set the passcode for access to your wireless network. Otherwise, your network will be "open" and anyone can freeload on your cable or DSL Internet access. They can also see your computer and the resources on it. It's important that you use very strong passwords to secure your devices and accounts. Words that are easy to remember are also subject to the dictionary attack on passwords. A strong password is a series of characters that doesn't make any sense. You should also use non-alphanumeric characters (i.e., !@#$%^&*(_+) as part of your very strong password.

I know this stuff is hard to remember. Well, fear not. You can save your passwords in an encrypted file by using KeePassX. This is a portable, cross-platform password manager that uses very strong encryption to protect your passwords. The program uses a master password to provide access to the encrypted contents. Once the master password is set and the password file is opened, you can start to create a set of credentials for every website or application that you use.

I like to use at least a different password for every website that I go to that will involve finances. And I use a very strong password that is created by the password generator built into KeePassX. KeePassX also allows me to copy the username and password into a website. And it allows me to automatically enter the username and password into a website. Don't worry, KeePassX will automatically erase the contents of the Windows and Linux clipboards after 5 seconds for security.

Remember the news about how Sarah Palin's Yahoo account was hacked? She was hacked because she used answers to secret questions that were easy to guess by someone who knew her or her history. A secret question or security question is a question that only you know the answer to, so that if you forget your password, you can recover your password by answering the questions. So, instead of using the secret question to answer a question only you know, this is another chance to use a strong password to further secure your accounts if need be.

But I digress. Back to the router. Once you have set up the router, you will also want to set up DNS on the router, too. DNS is Domain Name Service, which is a service that translates the internet address you know, like www.google.com, into an IP Address, like 208.67.219.230 (verified with the ping command). DNS is part of the backbone of the Internet. Without this service, you would have to remember the IP address of all your favorite websites. This service creates the convenience of allowing us to use names rather than numbers.

Most computers set up your IP address and DNS automatically when they start up. They will get that information either from your ISP or from your router, depending on your setup. In Windows, it's fairly easy to setup your own DNS, too. And most routers will allow you to use another DNS other than the one provided by your cable company.

The alternative I like to use is OpenDNS. OpenDNS provides a great safety service for your Internet connection. OpenDNS does a lot of research to see where the malware is coming from and helps you to steer clear of it. I use the service so that if I should happen to type the wrong address, I can be safely routed away from rogue sites that are serving malware.

And now here is one of my favorite tools: The Netcraft Anti-Phishing Toolbar. This toolbar provides information on every website you visit. First, they give you a risk rating with a colored bar that indicates the risk associated with a website. If it's red, you'll want to go elsewhere. If it's green, then you should be fine. They also tell you how long the site has been there, the rank in terms of popularity. Along with that, you get the location by country with a nice little flag to denote the nation and the name of the hosting service where the site is maintained.

To give you an example of how this works, imagine for a moment that you've received an email from Bank of America. They're telling you that you need to update your account information because it has not been updated in a while and they're concerned about the accuracy. They kindly provide you with a link to their site. So you click on it. The Netcraft Toolbar reveals that the site is located in Russia and was only created a month ago. Hmmm. Time to close the browser.

I want to summarize all this by pointing out that I'm using layers of protection, with each layer providing protection in different ways. Here is a point list summary:

  • Never run as admin on your computer.
  • Install and maintain antivirus that updates without admin support.
  • Install and maintain some sort of anti-spyware.
  • Install and mainain a personal firewall.
  • Install and configure a router (not much maintenance is required for this).
  • Use a secured password manager to manage your passwords (don't leave them on pieces of paper or in a spreadsheet on your computer).
  • Use OpenDNS for a safer browsing experience.
  • Use the Netcraft Antiphising Toolbar so that you can find out if the site you're on is safe.
Here, I have 7 layers of security to prevent my computer and/or my identity from being compromised. You may want to implement a few or all of them depending on your security needs and desires.

If you are in the unfortunate position of having to reload Windows to your hard disk due to infection, then you will want to re-install Windows and image your hard drive. I'd like to expand upon that list with some of my own ideas in a future blog.

If you need help setting any of this up, call me. You can find my website for PC assistance here:

www.ezcomputercoach.com

Have a safe shopping experience while you prepare for Christmas. Be well.

Scott Dunn

Monday, December 08, 2008

The cost of individualism

Here in America, we tend to favor the individual rather than the collective in a philosophy known as individualism. We covet and admire the lifestyle of the self-made man, the millionaire who did it all himself, the Madonnas who created their independent fortunes and the rugged individualist. Few can attain such a status, fewer still can actually walk the talk for all their "independence."

So how has that been working out for us? Like many of us, I read the news everyday. Everyday, there is a new problem to be solved. But what is the source of the problem, individual or collective? Are individuals really capable of solving the problems we face, all by themselves?

There are three examples to explore today, in this blog: cyber-security, health care, and the environment. In each case, I attempt to demonstrate the cost of individualism vs. the collectivist culture.

I bring this idea up for several reasons. I had the good fortune to have visited Vietnam a little more than a year ago, twice. While I was there, I noticed something quite striking, in contrast to America: the Vietnamese value cooperation over competition. They seem to have recognized that although it's possible for one man or one woman to solve a problem or attain great achievements, everyone needs to get involved to overcome a challenge. What I hope to demonstrate here is that we need to heed the example of Vietnam and others like them.

In contrast to Vietnam, this country is in a state of hyper-competition. Everyone here is looking out for number one. Anyone who has taken the time to study the example of Microsoft will see that they are constantly at "war" with others. When Steve Ballmer does one of his pep-talks, he is literally boiling over with enthusiasm for his company, his products and his plans. There is nothing wrong with enthusiasm such as his. But many companies have partnered with Microsoft only to become the latest litigation carcass left over after Microsoft has accomplished their goal. Microsoft is the perfect example of competition at any cost as a corporation.

This one-man show, go-it-alone example doesn't do so well in the context of cyber-security. By now, some of you have heard of "botnets", a group of computers that have been infected by a virus or trojan and turned into a "zombie" computer. A botnet can contain hundreds of thousands of computers as a group commonly known as a herd. A zombie computer is a computer that, unbeknownst to the owner, has been turned into a servant of a secret network of computers. This network will send spam, distributed denial of service attacks and collect credit card and other personal information to be used for stealing money. All the known botnets run on Windows computers.

For many years, Bill Gates, one of the founders of Microsoft, has preached the virtues of proprietary code. Creating proprietary code requires a significant level of secrecy, and that requires independence. Yes, they are the biggest software firm in the world. And they have a nice chunk of liquid cash to prove it. But contrary to the image of independence they promote, they are supremely dependent on developers. So they create developer tools that increase dependence on Windows. And They create products that depend on Windows. A case in point is Silverlight, a competitor to the Adobe Flash software so commonly used in places like YouTube. Microsoft makes a point of making Silverlight only for Windows so that people will buy Windows. Yes, there is a version that will run on Mac and Linux (Moonlight), but as Steve Ballmer likes to say, it will run better on Windows.

Microsoft was basically asleep at the wheel when the Internet came up behind them and passed them by in the 1990s. Along came Netscape which scooped up 80% of the marketplace before Microsoft could blink. So what did Microsoft do? In order to buy time, they changed the programming interfaces for Windows without telling Netscape so that the Netscape browser wouldn't work properly on Windows. At the same time, Microsoft got to work building their Internet Explorer browser to compete with Netscape and gave Internet Explorer away for free with the operating system. Netscape is now only a shadow of what it once was. Netscape has been resurrected as open source software in products like SeaMonkey and Mozilla Firefox because the only way they could compete is as a free product.

As someone who works in IT, I've learned something about the "monoculture" in computers. Microsoft has created a huge monoculture of computers with a 95% market share for desktop computers. The weakness of a monoculture is that when all computers act the same, one weakness will affect all computers with the same program. This explains the success of viruses on Windows computers. And who is providing the updates to these computers? One lone source: Microsoft.

This monoculture might explain the problems discussed in this article, which states we are losing big-time in the cyber war against the rest of the world. Windows is turning out to be our biggest liability when it comes to security in government and corporate infrastructure. There is a long and rich history to explain why this is that I can't get into it here, but if you'd like to read more on the subject, go here (scroll down to Security for more).

On the other hand, with Linux, there are many distributions of Linux. Many features of Linux actually comes from Unix. It was created in 1969 by AT&T with the notion that no single user should be able to destroy the work of another user on the same machine. Security was baked in from the start. That is one reason why you won't see many viruses running on Linux. For a virus on Linux, propagation is very difficult, and death is very quick. This not to say that Linux is impervious to virii. Linux is just a lot harder to break.

All software comes from source code. When a programmer writes source code for software, he will include notes in the source that provide documentation on the action of a section of code. When the programmer is ready to test, run or distribute the software, he will run the code through something called a compiler. This strips out the documentation known as comments, and converts the source code into binary code that the computer can understand and run. This binary file is what you get with Microsoft. With Linux, you get the source code and the binary, free and open source software (FOSS).

Instead of being developed by one company, Linux is developed by volunteers all over the world. Instead of closing the source code for the software, as Microsoft does, the source code for Linux is free for all to see and licensed under the General Public License. Everyone, including programmers, is free to run the software for any purpose they desire. They can also look for bugs and fix bugs and to make improvements. They are also free to distribute the binary code as long as they make the source code available to the community. This sharing of the code is what makes Linux so powerful.

As Eric S. Raymond said, "A thousand eyes makes all bugs shallow."

I offer this example to show the contrast between competition, as embodied by Microsoft and cooperation, as embodied by Linux. Microsoft tries to feign independence while mooching off of the rest of world for support of it's operating system and while charging for it. Free software communities acknowledge the complexities of the software and the need for collective review, repair and upgrades of the same software. Their effort to create better software is shared. The result is used like a utility. It is any wonder that the fastest computers in the world are running Linux?

Now lets turn to healthcare.

We're in the worst recession in 75 years and we're fervently looking for a way out of the mess we created. 5 years of war, a bass-ackward tax policy going strong for eight years, and lax regulation of securities have contributed to the mess. All of them are based on the premise that the individual is more important than the collective. We did the war, essentially alone (sorry, England doesn't count), prompted by little or no evidence that the war was necessary. The tax policy was based on the idea that rich individuals would spend money rather than hoard it. And the lax regulation of securities (securitized mortgages, credit default swaps, etc.) was based on the notion that the securities industry would regulate itself. On all of these fronts, we have been proved wrong.

I saw this very interesting opinion article in BusinessWeek. The statistics cited in the article are disquieting if not downright alarming. Here's a sample from the article:
  • The country (US) spends a world-beating 16% of gross domestic product on health, yet in international comparisons it lags behind a number of key measures.
  • The U.S. ranks 29th in infant mortality and 48th in life expectancy.
  • The number of people without health insurance was 38 million in 2007, and that number is guaranteed to have risen in the meantime with the recession that began a year ago.
A lot of this stems from severe mismanagement of the insurance companies. Take AIG, for example. The excesses of that company has been well documented with their lavish parties and executive bonuses. Were they thinking of their customers? Probably not. Perhaps they were a bit too focused on the next tax cut. Evidently, the largest insurance company in the world was busy making insurance more expensive for the rest of us. And that includes health insurance.

The health insurance industry is so focused on profits that the list of pre-existing conditions will only grow longer. As more and more people are excluded from health insurance due to pre-existing conditions, the cost will continue to increase for those that can participate. And so on as more and more people are excluded on costs alone. I thought that the whole point of insurance was to distribute risk among a large population.

Worse still, a recent study suggests that about half of all doctors would quit their practice given the chance for an alternative. This is symptomatic of insurance and government policies driven to cut short-term financial costs of health care. Paperwork is being used to exclude treatments in the same way that pre-existing conditions are being used to exclude people from access to health care. It seems that not only are people being encouraged to go it alone, they are being forced to do so.

I've never really been a big fan of socialized medicine. I see the "other people" gorging themselves to oblivion on fast food, alcohol and tobacco. I see them raising my insurance rates, even though I try to take good care of myself. Why should I have to pay for their stupidity?

Some of you have probably heard of NASE. They have a very interesting concept: allow the premiums to accumulate as savings for each subscriber. When they turn 65, refund the balance after subtracting the costs for service. This is a great idea, since it encourages people to take good care of themselves so that they have a nice retirement fund when the time comes. But in practice, it hasn't worked so well for the company, probably also due to poor management. There have been some horror stories that paint an unflattering picture of the company. In an ideal world, I'd like to see something like this really work.

So, unfortunately, the facts do not bear out any clear successes for capitalist style health care in terms of distribution. Sure, we have the best health care in the world, but who can really afford it? Socialist countries seem to be getting along fine with lower mortality rates and lower customer costs for care. A recent New York Times op-ed article is making a very strong case for Universal Health Care where no one is denied and everyone pays in one way or another. This guarantees complete distribution of risk and funding at the same time. And there appears to be a way to reduce the paperwork by focusing on preventive treatment rather than exclusion.

Health is inextricably tied to the environment. Some of you might be old enough to remember that President Nixon of the Republican Party proposed and helped to create the Environmental Protection Agency. But for some reason, over time, two Republican presidents surnamed Bush, have lost their way and tried to emasculate the EPA. Our current president has done the most damage by restricting or eliminating the power of the EPA. Apparently the neo-cons forgot that they are stewards of the earth, and their creator may not look so kindly upon their achievements. In the last few years, I have read of their second thoughts about passing legislation that would limit or remove power from the EPA.

It's easy to see the schizophrenia of the Republican Party these days when it comes to the environment. They want to gut the EPA and let the market decide how to care for the environment. The market on the other hand, is not satisfied by a clean environment, it's satisfied by money. Obviously, polluted land doesn't have much value, even if you live in Palos Verdes, California. Since the neo-cons took control of the Republican Party, they seem bent on consuming and destroying as much of the natural resources as possible, you know, before the second coming.

For the last eight years, the United States has been loathe to sign any treaties that would help the environment, in particular, the Kyoto Protocol, citing potential for serious harm to the economy of the United States. Here again, the economy rules supreme above the environment. Apparently, there was no discussion of the green collar jobs that would be created given the constraints of the Kyoto Protocol.

And now there is a new treaty designed to replace the Kyoto Protocol. And again, the United States will not participate, yet. It appears that with a new administration on the way, there could be significant change in attitude and action. As a nation, we have an opportunity to demonstrate leadership in protecting the environment, despite what other countries do.

As the world looks to us for leadership, they must be wondering aloud as to what we're thinking. Three countries, the US, China and India produce the majority of greenhouse gases. The US by itself uses 25% of the energy produced worldwide. And under the guidance of the Bush Administration, the US has proven to be unwilling to cooperate with other nations to limit greenhouse gases.

Global Warming and the consequences thereof, whether induced by man or not, is a problem we all face. The US cannot hope to solve the problem on their own without cooperation from other nations, and vice versa. Going it alone is not an option, particularly when we look at the amount of landmass we stand to lose from rising sea levels.


In the realms of cybersecurity, healthcare and the environment, we will need to work together to solve our common problems. I offer the foregoing as examples and incentive to work with each other, and to reason things out. We must work with others internationally, nationally, and locally to solve the problems we face.

Whether it's capitalism, communism or soclialism, no system seems to work perfectly for everyone. But one thing is certain: so long as we continue the idea that it's "every man for himself" and that men and women continue to pursue advantages and control over one another, no system will work. Under those conditions, people will continually game the system to assert an advantage or to attain a sense of security.

As soon as we realize and live as if we're all in it together, then we can solve all the problems we experience together. It is my hope that under the new administration, cooperation will be valued over competition.

Tuesday, November 04, 2008

Zero Sum Game

The zero sum game idea says that when I win, you lose. In the economic sense, as I make more money, there is less money for you to make, too.

Now consider the trends of the last 20 years or so: as executive compensation reaches stratospheric heights, the top 10% of the earners in this country are earning almost 50% of the available income in the economy. And the top 1/2% are pulling far away from the rest of the top 10%, too. That means it's getting really tough for everyone else to earn money.

What will people do when faced with the problem of trying to feed their children, themselves or just have a place to live? There is a tendency for people to turn to crime when the economy gets hard and cold. And with advances in technology, the opportunities for low risk, non-violent economic crimes increase. Take spam, for example. Who among us has not received spam? Any women out there *not* getting emails proffering male anatomical enhancements?

Just who are these people who ship spam with their assortment of products and malware to boot? Are they trying to put braces on their kids' teeth? Sending their kids to college? Or are they just trying to make it big in an already crowded market?

The point I want to make here is this: when the wealthiest earners are already taking close to 50% of the economy, and they need to feel like they're achieving something, they're only going to hoard more. That means the rest of us have to work a lot harder just to make ends meet. If you don't believe me, ask Robert Reich, a former official in the Clinton Administration. To paraphrase, "giving wealthy people tax cuts to get them to spend more money isn't going to work; they've already spent all they want to spend and they could easily save the rest."

"Wait," you say, "those wealthy people will invest in the economy with their money!" No, they will buy Credit Default Swaps.

In the current financial meltdown, some very smart people took a huge risk with credit default swaps (CDS). A CDS is basically insurance on a debt, such as a bond, or a mortgage. A bondholder gets nervous about his investment, so he buys a contract that allows him to share the risk with someone else. A CDS says, "I'll pay you 2-4% to share the risk of the debtor on this bond in the event that the debtor defaults on his payments." The reason for the meltdown? More than one institution or entity bought a CDS on the same credit obligation for the same debtor, the companies who sold them did not make the contracts known to the public or the government, and there were no requirements for the seller to maintain reserves to pay off the people who called their option on the CDS. Like I said these investments were created by really smart and wealthy people.

It would seem that this is the free market economy in action. But when these same investors saw that they could lose their investment, they went to the government to get help. So, on the one hand, they didn't want regulation of their investment, and on the other hand they created a situation that required government involvement and financing to fix it. Now regulators and legislatures are waking up to the need for adult supervision of CDS transactions.

But I'm afraid we're in a catch 22. Wealthy people can always pay for the legislation they want. Which means, if they're "too big to fail", they can make the government pay for their mistakes. Being too big to fail means they can take the economy down with them. That means the rest of us will pay for their mistakes in taxes.

Some have commented on the incentives to take such risks. Imagine that you're making $2 million a year as head of an investment firm and you manage $20 billion or so. You want to feel like you're really spending money when you go shopping, so you go to Needless Markup...I mean, Neiman Marcus, to shop for some new clothes. The amount of money you spend will tend to scale with the amount you make. But the amount you save will just be a lot more than the rest of us, unless you're Michael Jackson.

The same is true for making money. If you're making $2 million already and you want to get a raise, the chances are pretty good that there isn't much more room for a raise if 50% of the gross income in the country is already spoken for. Finding a legitimate means of making more money becomes harder and harder as the money supply is consumed by the uber wealthy. This is even worse if the Fed shrinks the money supply, you know, M3. Wait. They don't publish M3 anymore. What's up with that?

Now don't get me wrong here. I believe in capitalism to a certain extent. If you're doing good work, you deserve to earn money from it. But notice how everything came together to create an organized catastrophe. People wanted to buy homes before they got locked out of the market. Real estate investors wanted to make money so they encouraged home buyers to hurry up and buy before it's too late. To help those tardy home buyers, really creative financiers wanted to make more money, so they created wacky mortgages with adjustable rates with payments that increased 50% or more after a set period of time. People who bought CDS instruments could see this coming and $65 trillion of domestic and international investment money was diverted to betting that *other* people would default on their loans. Ha, ha. Did somebody say "infrastructure"?

This unregulated and under-reported investment system gave rise to risk that investors were not willing to finance themselves. So the rest of us are financing it, and that is the zero sum game. No wonder health insurance is so expensive. I say this because AIG, formerly the largest private insurer in the world, was hip-deep into CDS investments. And it turns out that the government will start to report on it so that we know who did what and when with these instruments. AIG is just the tip of the iceberg. On November 4th, we're going to see just how deep the other insurance companies got into it, if they still are.

Oh, and by the way, I hear that John McCain is really worried that Barack Obama will "spread our wealth around." He must be talking about the maintenance payments the rest of us will be making, as taxes, to repay the debt that will have to be sold to finance the bailout. A bailout for McCain's most ardent supporters, really big corporations who bought into this mess in the first place. So, who exactly will be paying for this? People who can buy the legal counsel wise enough to limit their exposure to taxation? Hmmm, probably not.

Perhaps spreading the wealth around might just be the best thing we could do to get the economy going again.

Saturday, October 18, 2008

Casting the Winning Vote

In the last two presidential elections, there were some spoilers from third parties. For example, many of you have heard of Ralph Nader, who has run his campaign from a variety of parties and platforms. As he ran against Bush and Kerry, he received a lot of criticism for dividing the Demcratic vote. But he had every right to run.

I also remember Richard Boddie from the Libertarian party when he ran against an Orange County Republican Bob Dornan for a seat in the House. He drew enough votes from the Republicans to allow a victory for Loretta Sanchez. Not only that, but he went to the local Republican Convention to pass out fliers promoting himself for office while bragging about what he did to split the Republican vote from Dornan. Ha, ha. For this year, here's an interesting story about Bob Barr that you might like, too.

Yesterday, I went to the registrar of voters to verify my registration to vote. And while I was at it, I saw that there was early voting, so I voted, too. There is good news and bad news. The bad news is that Diebold voting machines are still in use. The good news is that they are running a paper ticker that records each vote for verification later. Hopefully, there won't be any lost votes, changed votes, or other such controversies. But I can now say that I have voted in Utah, I have a Utah license plate, registration, and drivers license. I'm a Utahn...I guess.

I'm kind of libertarian, liberal and conservative. I take what works for me and I leave the rest. I used to be Republican when they were the party of freedom. Now the Republicans would prefer that I am not able to bring my own water aboard an airplane. They want to have ready access to my email (PGP, anyone?), my phone calls, my bank statements - pretty much everything - just in case I happen to have dinner with a terrorist. We used to have "probable cause" now we have "the police state". This from a political party bent on wining an unwinnable war, making enemies around the world and then acting insulted when their authority is questioned. Perhaps they have forgotten what it means to have faith.

But I digress. Back to the voting thing.

I've talked to many people over the years about voting for third parties. When I mention someone like John Hagelin, who ran for the Natural Law party in the 2000 election, I say that I would have voted for him if I had known more about him. He's a particle physicist who can bring an entirely different point of view to the office of president.

When I look in the eyes of the people who wanted to vote for a third party but didn't, I see the real tragedy of American politics: the desire to be on the winning side. I can remember debates about whether or not to show the news relating to precinct reporting of votes on the east coast to the west coast. The debate centered on this very issue. The concern was that if people on the west coast knew how people on the east coast were voting, they'd change their vote so that they could be on the winning side. Sure enough, millions of people changed their vote over the years just to be able to say "Yeah, I voted for the winning guy!" How stupid is that?

There is a similar issue afoot in this and every election. We know now that there are a plethora of third party candidates, and there are quite a few of them on the ballot for president this year. Will people vote for them? Somebody will. But my conversations with people who had a desire to vote for third party candidates reveal something else, and they go something like this:

Me: So who do you like for President this year?

Hiim: Oh, I like Ralph Nader. He says that every child who graduates high school should know how to use the Freedom of Information Act and the Privacy Act to get documents about themselves from the government. We need open government laws and I like that.

Me: Are you going to vote for him?

Him: Are you kidding? That would be a wasted vote! I'm voting for Obama!

Me: So how will your guy ever win if you don't vote for him? I mean, if you're not voting for the guy you want, aren't you just wasting your vote, anyway?

Him: Doh!

See what I mean? The two major parties are depending on the heard instinct to deter us from seeking alternatives. And they know we want to be on the winning side. We want to make sure our vote isn't wasted. So we get two political parties that can pretty much act like one, by precluding any meaningful choice in the elections.

There is one more element in American politics that hasn't been discussed much on national television: equal time. When we watch Meet the Press, or the debates, do we *ever* see a third party candidate get into an argument with either a Republican or a Democrat? I know I sure haven't. Have you? Those debates can get really messy. Does anyone remember what happened with Jesse Ventura?

How can people even get to know the third parties if network television isn't even willing to give them the air time - FREE airtime - that the two incumbent parties get? I guess the greatest fear of network television corporations is that we might actually get a chance to compare Democrats and Republicans against third parties. Hey, if we're watching network television, we're probably not paying for the advertising.

So ask yourself, are you feeling lucky? Are you willing to cast your vote for the guy you really want, or do you just want to be on the winning side?

Tuesday, September 30, 2008

The Cash Society

As we stand before the precipice and look down, we need to take inventory to see how we got here. The 30 year mortgage has been around for a long time, and recently, within the last 30 years, it has gone through some permutations. As some may recall, around 2003, the Adjustable Rate Mortgage (ARM) became wildly popular.

The decision to create, market and finance ARMs turned our fortunes. Think about the brokers who sold them. Where are they now? Some could see this current crisis coming, but few were willing to openly answer the obvious questions: what happens when the rates start to adjust? As payments on these loans began to increase, so did late payments, defaults and eventually, foreclosures.

Setting that aside, lets look at the 30 year mortgage on its own. A simple calculation reveals that a mortgage paid at 7% annual interest, assuming 10% down, will more double the cost of the home you buy over 30 years.

The pattern is similar for auto financing. The interest costs are significant for autos and they can increase the cost of the car often by 50% or more over time.

Now lets look at credit cards. Some people are lucky enough to have 0% or a low 5-6% interest rate on the balance. This makes the cost negligible, and worth the convenience. If you miss a payment, however, the fine print says that your rates could go up significantly. The rates for credit cards held by teetering payers can shoot as high at 30% or more.

The bottom line is that all forms of credit make everything more expensive. Everyone has heard of inflation. We see it all the time in the news. And there are so many ways to measure it, too. Inflation is defined as an increase in the cost of goods over time. While the cost of a broom may rise over time at a constant rate, the cost of food and fuel can fluctuate wildly.

Credit is a hidden form of inflation in the sense that we aren't really trained to see how much it costs. This concept gets some lip service when we go to school. But instead of being taught how to avoid it, we're taught that the cost of credit is the cost of doing business. It's assumed to be unavoidable. This leaves an indelible impression upon a young mind.

For many Americans, credit cards have been used to maintain a standard of living. It is not unusual for people to accumulate $10-20,000 in personal debt through credit cards. This debt is often accumulated through the use of credit cards to pay for living expenses when the economy is slow. Many will use credit cards to purchase vacations and luxury items they couldn't otherwise afford. But few if any can imagine a life without using credit.

 I know at least one man (whom I admire deeply for his business savvy) who doesn't need credit in the sense that most people are familiar with. He built his business on cash. He pays his invoices early for the discounts he receives from the vendors who offer the discounts. He owns all of his equipment, and the building from which he runs his business. And since he has no debts, he doesn't panic when the trade gets slow. He just lays people off and reduces purchasing until the level of employment and the need for materials matches the rate of business that he's doing. When business picks up again, he hires and buys.

Without loan payments to make, which are constant over time, he can adjust his cash flow with the business instead of with the bank.

Credit doesn't just make everything expensive due to the interest paid on the loan. Credit is used in this country to create artificial demand. This demand increases prices. That's why the crowd goes wild every time the Fed drops their rates. And I dare say that credit also creates a pool of cheap, skilled and willing labor. Whichever came first is still in debate.

Let's look at the hidden costs of credit at the checkstand in simple terms: if you don't have the money, you can't buy it. But if you have credit, you can just pay it off over time. This increases demand for goods and services. And demand creates inflation.

As to the labor pool, here's the big picture: You are employed. You have a home loan, an auto loan, and maybe a few college loans, a few credit cards and a family to support. But you have no savings. A vacation is a far off fantasy without a credit card or a line of credit on your house. Worse, you can't choose the job you want or the pay that you want because you have to keep working to keep making payments.

Imagine a parallel universe where you have a year of expenses saved up. Now you can kiss your boss goodbye (ew!) on good terms, and take your time finding the job you want. Or you can take a month off to reassess your direction in life. Whatever. You have a contingency fund to handle most small emergencies, too. With a year of expenses in the bank, the bank wants you to stick around. Like I said - it's a parallel universe.

Now there's a study in contrasts. Why didn't we do this from the beginning? Maybe most Americans are masochists who need someone like a banker to help them.

Remember how much fun we were having as we watched home prices double in Southern California (and spike unreasonably fast elsewhere)? That was due to increased demand for homes created by "creative financing" mortgages. By creating easy money loans, people suddenly had the money to get into the housing market. That is the kind of demand for homes we saw then could never have happened without ARMs.

Without ARMs, people who wanted to sell their homes would have had to either lower their prices or wait. And that is exactly what is happening now. The ARMs are gone. Prices are falling and people are waiting rather than selling.

Without easy credit, prices will have to fall. There is no other way for the economy to correct itself. But from a practical standpoint, we are not completely powerless over inflation. If we live within our means and buy what we need or want with cash, we can keep inflation in check. Confused? Let me explain.

If people refused to borrow money and instead chose to save their money, what would happen to the economy? Producers and sellers would have two choices: lower their prices, or wait.

Now consider this: saving money and only using cash is not just a choice, this way of life creates choices. When you use credit, you are dependent on someone else to make the decision for you. In a credit - I mean, debt economy - the bankers make the choice for you. They decide if you will buy something or not.

But if you have the money in the bank, it's yours to spend. And the bank is going to pay you interest if he wants you to keep your money there. It's not so much that you're in control. You simply have more choices available to you. And by tempering your demand with the amount of money you have on hand instead of borrowing, you help to keep prices down.

A cash society lives on the cash they earn, and has more control over prices by controlling demand and can make spending decisions that are relatively unencumbered by the interests of bankers. Remember, a banker is only your friend to the extent that you are willing to pay him back on the loan, or to the extent he is willing to pay you interest on your deposits.

The choice is yours. Where do your interests lie? Pay or be paid?

Sunday, September 28, 2008

Power and Money

A man has only as much power as other men are willing to give to him. Seems obvious, right? But how many people actually think of that and put it into practice?

Here's an interesting thought experiment. The richest man in the world goes to a small town on a road trip. We'll call him Bill. Before he arrives, the whole town is abuzz about his arrival and they learn that Bill has been pushing legislation that is contrary to the interests of the town.

When Bill arrives, he checks into a hotel. He talks to the clerk and asks about a room. The clerk looks and says, "Sure we have a room for you." Bill gives the clerk his name and hands him a credit card. Suddenly, the clerk announces that there is no longer a room available, and returns the card.

Bill is surprised and suspicious. So he leaves to try another hotel. When he gets there, he encounters the same result. A room is available until he introduces himself. He repeats this until he begins to become hungry.

He heads to a local restaurant to eat. But the restaurant knows who he is. He gets a seat, sure enough and the waitress comes to him to take his order. When he finishes giving his order, the waitress asks for his credit card. Bill is surprised by this, but he complies. She comes back to say they're out of food and that he will have to eat somewhere else.

Bill repeats this a second, and a third time. He sees that he needs gas. He worries that something isn't right so instead of trying to use the ATM directly, he goes to the little snack shop to pay there. He is instantly recognized by the proprietor as word has gotten around. While other people are filling up their tanks, the proprietor announces that "We're out of gas, sorry."

Bill confronts the proprietor with this crazy-making reality. "Excuse me, but people are still pumping! I'll give you cash!"

"No you won't!" says the proprietor. Bill is flabbergasted as the proprietor points to a sign above the door. It says, "We reserver the right to refuse service to anyone".

Bill is stuck. No food, no room, no gas. Bill gets really worried when he discovers, after a few phone calls, that this isn't the only town. It's worldwide.

This is the worst possible result of the social contract. When we refuse to acknowledge a man's power by refusing his money.

When we look to our leaders and wonder why they do what they do to the rest of us, we must also look to ourselves and wonder "Did we ask for this? Did we somehow give them permission to do this?" The most probable answer is, "yes."

Tuesday, September 23, 2008

Holding the Bag

Okay, lets say that they do eventually pass this bill (based on the latest news, it's not exactly a certainty). I heard on NPR that the Fed has $800 Billion in the bank, just looking for usury. So they lend this money to the government. And the security for the loan? Bonds. Lots of bonds.

How do these bonds get paid back? With taxes. For many people the connection between the federal debt, which is now limited to around $10 Trillion, and taxes doesn't appear so easily. The government has to sell debt when it runs out of money. And that happened a long time ago, long before many of us were born. So now we live in a debt economy.

Who buys the bonds? Other than the Federal Government with more than half the outstanding debt (I know, it's weird), foreign governments are the biggest customers taken together. China and Japan come most readily to mind. And then there is the rest of us. Many people have openly questioned what will happen if China and Japan decide to unload their bonds. The net effect is a weakening of our own currency.

When our currency grows weak, foreign goods, like oil, become more expensive, even if demand is low or flat. And one thing that the Bush Administration has been consistent about is weakening our dollar. That's a big part of what makes gasoline expensive to us. And they seem to think it's a plus. When oil was selling at $140 per barrel, there was a bit of press about how high oil prices are bringing jobs home. Nice. Here's one bizarre example.

It's easy to get lost in the details of the situation. Most people are very focused on the details of the pending legislation to fix the Wall Street crisis. But the big picture looks more like this:

  • If you work for someone else, you're not going to be able to charge more for your products and services like a business can when the dollar loses its value.
  • If you work for someone else, you're not going to be able to use your expenses to limit your tax liability like a business can.
Regardless of who you work for, if you don't have money to pay for the best in tax preparation and legal tax planning, you're not likely to be able to avoid the taxes that are coming to pay for this debt.

And that is the main problem with this proposed $700 billion bailout. The executives of Fannie Mae, Freddie Mac, AIG, Bearn Stearns, etc., all sang the song of free-market capitalism. Whether or not it's really a free market is open to question. And when it came down to owning up to their own mistakes, they want YOU to pay for it. It's only fair.

To put it another way, they privatize the benefits of capitalism while socializing the risks. Remember socialism? You know, the little brother to communism? That's what they're talking about. Big business works better if you privatize the economic benefits and socialize the risks. To put it in layman's terms: Executives keep getting paid even when you lose your job.

Since 1994, Republicans have been doing what they can to "de-regulate" the investment industry. Yeah, they de-regulated it alright. Anyone remember the failed experiment of de-regulating the power industry in California? I do. Power tripled in cost so that people like Enron executives could put their money in the Grand Cayman Islands as a safe investment.

The Bush Administration is really worried that the Democrats will load up the bill with restrictions, such as the restriction on executive pay for companies that get assistance from the government. I guess means testing is okay for poor people seeking welfare or unemployment, but for executives, that would be humiliating!

This week, they're "negotiating" on the terms of the aid. What I find interesting is that the negotiations are in secret. Why all the secrecy? It's our money too. Seems like they want to come up with a plan and spring it on the rest of. You know, like it's "now or never". At least Republicans are starting to speak up and point out alternatives other than handing the banks a big wad of money all at once. And then there is the insurance plan. Hmmm. Don't people buy mortgage insurance anyway? Now that I'm thinking about it, where are those insurance guys? The plan was submarined without informing Treasury Secretary Paulson. Some have characterized the effort behind this plan as a way to divert attention to McCain's "leadership skills".

I see also that the FBI is getting involved. It seems that there are four firms at the heart of the matter and they want to know why. And now they're letting people know that investigating the same companies for wrongdoing will be hampered when we give them a wheel barrel full of money to pay for their mistakes.

At the beginning of this week, we were talking about a huge bailout of the financial industry with almost no oversight or accountability. Democrats have been negotiating with the Bush Administration to require oversight. Many House Republicans still seem to insist that relaxing the regulations could help the situation. Even if there is some oversight, it will only be administrative oversight by unelected officials. Whether it's a handout of money, insurance or some other cooperative put together by the financial industry, one thing remains clear: control of the process is not in the hands of the people who are paying for it.

Monday, September 22, 2008

Money for nothing

Anyone remember that song, Money for Nothing? Seems like for the last few years, a lot of people wanted that. Anyone reading the news is aware that the financial markets are tanking primarily as a result of really bad real estate investing. Investors got really greedy with their adjustable rate mortgages (ARM). Homeowners got in with the false hope that their house would increase in value enough to allow them to refinance their loan with a safe and sane 30-year fixed loan before the interest rates started to adjust with the market. But that hope was really a fantasy.

Between 2003-2006, we saw housing prices double in Southern California. Much of the rest of country saw something similar, or a serious spike in prices. During this time, people were buying houses to flip them for a tidy profit. Real estate agents were telling people that if they didn't buy now, they'd be frozen out of the market. Many people with bad credit wanted in, fearing they wouldn't be able to later. So they turned to the ARM.

Now they're wishing they hadn't. Or at least wishing their homes had increased in value. But they just couldn't go up forever, at that rate, anyway.

The Adjustable Rate Mortgage was probably the single biggest factor driving up home prices. Initially they were intended to give those who didn't have a home, a way to buy into a home.

Many economists knew this day was coming. But we really didn't see that much in the press about it. Sure Greenspan said something about it, and I'm sure people were listening intently, nodding when everyone else nodded. Unfortunately, it takes months of hard work by highly skilled technicians to parse his language into common English.

I remember reading about it in 2006 in the OC Weekly, in an article called "Welcome to Stanton!", by Rebecca Schoenkopf, aka, the Commie Girl (sorry, dead link - but I wrote to the paper to ask them to put it back). She had pointed out that even in the bad parts of Garden Grove and Santa Ana, where the doors have iron gates, and police helicopters fly nightly, houses were selling for more then $400,000. Why? ARMs. And she boldy predicted the mess we're in today.

Anyone reviewing housing prices on Zillow.com will see that housing took a wild ride during 2003-6. They have a pretty cool feature that lets you see the value history of the house over time. During that time, municipalities were basking in the glow of higher property taxes. Remember, municipalities have accountants who work for them. Surely they must've smelled the problem miles away. But strangely, they were silent. Everyone was happy as long as the housing prices continued to rise. Except for the people who wanted to buy a house.

I grew up in Manhattan Beach, California. When my parents bought a house there, they paid $50,000 for it, mumble-mumble years ago. That same house at the height of the boom in 2006 was worth nearly $2 million. In fact, most of the houses on my street where I grew up were worth close to $2 million. I talked to my sister, and she says "I wouldn't want to live there. Go down one of those streets at night, around 6-7pm. There's nobody home because they're working! Go to Sand Dune park and look at the people there: Nanny's and their kids!" It takes a lot of work to pay off a $2 million mortgage.

Now that we've watched the biggest investment banks fall, Bear Stearns and Lehman Brothers, and AIG get a nice helping hand of $85 Billion, and Fannie Mae and Freddie Mac get nationalized, where are we? We have a Republican administration pushing a bill that would give omnipotent authority to the Treasury Secretary to buy bad mortgages. Oh, and don't forget, we don't want the courts to get involved. We can't have pesky judges get in the way while we help our friends and allies in Wall Street.

So are we willing to spend $800 Billion to help the investment industry save their posteriors? I see that the Democrats are speaking up about the golden parachutes of the people who ran these firms into the ground. So how about it, CEO of Fannie Mae? Now that you've decimated your company's stock, are you going to give back? Oh, wait. You still need to be able to send your kids to a private school, live in a gated community, take the family on vacation in Europe twice a year and make payments on 3 cars? No can do, my friend. You have to come down here, with the rest of us if you want to get back up again. Oh no! He flew to Barbados! Sigh. Easy come, easy go.

A recession is what happens when the middle class cannot afford, or is unwilling to work for what the upper class is willing to pay. That is what we have here. The lower classes couldn't afford to get a home on what the upper classes were willing to pay. Notice that upper class is still not willing to pay. They're really worried that they won't have enough money for when Jesus returns.

Howcome I don't hear anyone talking about "infrastructure"? Well, I heard Obama talking about it, but only briefly. The point is this: we could spend $800 Billion to save the people who got us here, or we could do a Roosevelt and start building roads. Remember the bridge collapse in Minnesota? Michael Heller says that we could eliminate delays at airports if we built 25 new runways at our busiest airports. But that would be too expensive (there are easement issues, too, but that's another article).

How about communications? Check out this website by the Communications Workers of America. Seems they have noticed that Japan has internet access we could only dream of. They get 61 Mbs on average. That kind of money could light up all the dark fiber laying around in this country, too.

Infrastructure is what made this coutnry great. Without all the freeways, airports, plumbing, wiring and communications, we couldn't live the way we live now. But all of that takes maintenance. Maintenance that the billionaires in Dana Point and Beverly Hills weren't willing to pay for with taxes. Perhaps they'd rather go to war.

I moved from California to Utah. Life is pretty nice here. But one thing I've noticed is that they're really busy with the infrastructure. It's hard to drive down a major road without seeing some sort of construction going on. They may be paving the road, laying pipe, or just fixing it up. But the're always working on something. They get it that infrastructure is important.

That might explain their low unemployment rate of 3.8%, relative to the rest of the country, which now stands around 6.1%. I'm sure there are other factors at work here, no pun intended. But the bottom line shows up in the infrastructure.

Building infrastructure would add more value to homes, a lasting value I might add, than bailing out executives who wanted to fleece people who wanted a home to live in. Talk to your friends and politicians about it. Get the message out.

I rest my fingers.

Sunday, September 14, 2008

The Veil of Palin

Over the last week or so, I've become more and more alarmed about Governor Palin. Yes, I say Governor, and I will not refer to her as "Sarah Palin". That would be sexist. And, as Willie Brown points out, it lends a familiarity with her that Democrats do not really enjoy. He's a little bit pompous, but he does make a good point here.

The New York Times is running an article (you'll get 4 1/2 pages, and then you must subscribe) that describes in detail a history of Palin that shows an extreme concern for secrecy. Like intending to use private emails on private devices to conduct government business so that the records of the email cannot be reviewed under open government laws, as an example. We've already seen this in the Bush Administration, too. Remember the lost emails?

Very scary. The Democrats have their own issues to be sure, and many of us can remember secrecy in the Clinton administration. But this, and potentially the next administration have taken secrecy to new extremes. And Palin seems intent on continuing that philosophy.

To illustrate the difference, let me give you an example. A number of sources have noticed a change in the way the Freedom of Information Act and the Privacy Act have been enforced and administered. During the Clinton years, the executive branch agencies erred on the side of disclosure. But during the Bush II years, they erred on the far side of withholding documents.

I can remember when I was a young man, how the Republicans proudly stood for freedom. But now, as an older man, I see that they live in constant fear of being exposed. The war on terrorism is a convenient cover for the need for secrecy and it will only be more so under Palin. I don't think the Republicans stand for freedom anymore. In fact, I'm not really sure what they stand for. It's a secret.

Wednesday, January 30, 2008

Silence of the lambs

Today's post is about the Brattleboro Petition to charge Bush and Cheney with war crimes. Setting aside the legality of the petition, lets look at the behavior.

Some of you might remember how the Republicans were seeking to impeach Clinton. Do any of you remember any death threats against the people who filed the charge of impeachment? Or even against people who were in favor of it? Or even threats like, "I'll never visit your state again!"?

I don't remember anything like that. From the left there was civilized discussion about their defense of then President Clinton.

Fast forward to Brattleboro and we see the sheer vitriol and rage from Republicans who must be at least somewhat embarrassed to be caught in war they cannot win by their own hand. I use the word embarrassment to point out the fact that there are many Republicans who voted for Bush for his second term. Many now regret that vote.

After $370 billion (and still counting) spent, what have we to show for it? A country full of Iraqis who wish us to leave so that they can settle their own disputes. We've left more than a million dead (by some estimates).

The main thing I want to point out is this: when people speak out against Bush, conservative voters are quick to defend him with rage and harsh words. But when a liberal is attacked, there seems to be much more civilized defense from liberals.

I realize that those who attack the town of Brattleboro have the right to speak their mind. But they seem to forget that their attempts to quiet that town, get them to shut up, could very well impair their own ability to speak their minds, too.

Wednesday, January 23, 2008

Why you need ID Theft Protection

Today, I read the news and here’s what I found:

Analysis: Metcalfe's Law + Real ID = more crime, less safety

This article describes the problems inherent with multiple databases, across multiple agencies, all linked together. The common thread and threat is that the more useful government databases become to white hats (the good guys), the more useful it becomes to black hats (the bad guys).


The
US government is collecting data from every source imaginable to track criminals, true enough. But they are also collecting data on innocent people who have committed no crimes at all. As stated in the article:


This is, of course, a fundamental problem inherent in the very nature of any massive, centralized government data-sharing plan that spans multiple agencies and connects untold numbers of state and federal law enforcement officers: the usefulness of such a system to any one individual (a white hat or a black hat) grows roughly with the square of the number of participants who are using it to share data (Metcalfe's law). So the more white hats that any of these programs manage to connect to each other, the more useful the network as a whole will be to the small handful of black hats who gain access to it at any point.


The governments around the world are working on creating an indestructible, impossible to duplicate identification card that will be tied into multiple databases across many if not all agencies and shared between governments and agencies.

Now there are some who might say, “No problem, I’ve got nothing to hide. And if you have nothing to hide, there’s nothing to worry about.”


But consider what happens if one person makes an unauthorized use of this collection of databases. For him, it’s like shooting fish in a barrel. It would be easy to create a profile or dossier to use for Identity Theft. Such a database can be used to find a suitable victim for a crime, white collar or violent. Or, as the story linked above shows, it can be used by criminals to determine how law enforcement is planning to act in order to evade law enforcement.

Alternatively, it can be used by political incumbents to circumvent or dilute the will of the people. Imagine that such action is what is happening now. Consider the possibility that your votes could be thwarted by people with access to the right databases.

It is in this age that ID Theft protection is no longer a luxury, but a necessity. I've found some very interesting tools for protection. If you're interested, please contact me.

Good day, and good luck.