NSA Spying Directly Harms Internet Companies, Silicon Valley, California … And the Entire U.S. Economy

Mass surveillance by the NSA may directly harm the bottom of line of Internet companies, Silicon Valley, California … and the entire national economy.

Money News points out:

The company whose shares you own may be lying to you — while Uncle Sam looks the other way.

Let’s step through this. I think you will see the problem.

Fact 1: U.S. financial markets are the envy of the world because we have fair disclosure requirements, accounting standards and impartial courts. This is the foundation of shareholder value. The company may lose money, but they at least told you the truth.

Fact 2: We now know multiple public companies, including Microsoft (MSFT), Google (GOOG), Facebook (FB) and other, gave their user information to NSA. Forget the privacy implications for a minute. Assume for the sake of argument that everything complies with U.S. law. Even if true, the businesses may still be at risk.

Fact 3: All these companies operate globally. They get revenue from China, Japan, Russia, Germany, France and everywhere else. Did those governments consent to have their citizens monitored by the NSA? I think we can safely say no.

Politicians in Europe are especially outraged. Citizens are angry with the United States and losing faith in American brand names. Foreign companies are already using their non-American status as a competitive advantage. Some plan to redesign networks specifically to bypass U.S. companies.

By yielding to the NSA, U.S. companies likely broke laws elsewhere. They could face penalties and lose significant revenue. Right or wrong, their decisions could well have damaged the business.

Securities lawyers call this “materially adverse information” and companies are required to disclose it. But they are not. Only chief executives and a handful of technical people know when companies cooperate with the NSA. If the CEO can’t even tell his own board members he has placed the company at risk, you can bet it won’t be in the annual report.

The government also gives some executives immunity documents, according to Bloomberg. Immunity is unnecessary unless someone thinks they are breaking the law. So apparently, the regulators who ostensibly protect the public are actively helping the violators.

This is a new and different investment landscape. Public companies are hiding important facts that place their investors at risk. If you somehow find out, you will have no recourse because regulators gave the offender a “get out of jail free” card. The regulatory structure that theoretically protects you knowingly facilitates deception that may hurt you, and then silences any

witnesses.

This strikes to the very heart of the U.S. financial system. Our markets have lost any legitimate claim to “full and fair disclosure.” Every prospectus, quarterly report and news release now includes an unwritten NSA asterisk. Whenever a CEO speaks, we must assume his fingers are crossed.

***

Every individual investor or money manager now has a new risk factor to consider. Every disclosure by every company is in doubt. The rule of law that gave us the most-trusted markets in the world may be just an illusion.

In a subsequent article, Money News wrote:

Executives at publicly traded companies are lying to shareholders and probably their own boards of directors. They are exposing your investments to real, material, hard-dollar losses and not telling you.

The government that allegedly protects you, Mr. Small Investor, knows all this and actually encourages more of it.

Who lies? Ah, there’s the problem. We don’t know. Some people high in the government know. The CEOs themselves and a few of their tech people know. You and I don’t get to know. We just provide the money.

Since we don’t know which CEOs are government-approved liars, the prudent course is to assume all CEOs are government-approved liars. We can no longer give anyone the benefit of the doubt.

If you are a money manager with a fiduciary responsibility to your investors, you are hereby on notice. A CEO may sign those Securities and Exchange Commission filings where you get corporate information with his fingers crossed. Your clients pay you to know the facts and make good decisions. You’re losing that ability.

For example, consider a certain U.S. telecommunications giant with worldwide operations. It connects American businesses with customers everywhere. Fast-growing emerging markets like Brazil are very important to its future growth.

Thanks to data-sharing agreements with various phone providers in Brazil, this company has deep access to local phone calls. One day someone from NSA calls up the CEO and asks to tap into that stream. He says OK, tells his engineers to do it and moves on.

A few years later, Edward Snowden informs Brazilian media that U.S. intelligence is capturing these data. They tell the Brazilian public. It is not happy. Nor are its politicians, who are already on edge for entirely unrelated reasons.

What would you say are this company’s prospects for future business in Brazil? Your choices are “slim” and “none.” They won’t be the only ones hurt. If the U.S. government won’t identify which American company cheated its Brazilian partners, Brazil will just blame all of them. The company can kiss those growth plans good-bye.

This isn’t a fantasy. It is happening right now. The legality of cooperating with the NSA within the United States is irrelevant. Immunity letters in the United States do not protect the company from liability elsewhere.

***

Shouldn’t shareholders get to know when their company’s CEO takes these risks? Shouldn’t the directors who hire the CEO have a say in the matter? Yes, they should. We now know that they don’t.

The trust that forms the bedrock under U.S. financial markets is crumbling. [A theme we frequently explore. ] If we cannot believe CEOs when they swear to tell the truth, if companies can hide material risks, if boards cannot know what the executives they hire are actually doing, any pretense of “fair markets” is gone.

When nothing is private, people and businesses soon cease to trust each other. Without trust, modern financial markets cannot function properly.

If U.S. disclosure standards are no better than those in the third world, then every domestic stock is overvalued. Our “rule of law” premium is gone.

This means a change for stock valuations — and it won’t be bullish.

CNN reports:

Officials throughout Europe, most notably French President Francois Hollande, said that NSA spying threatens trade talks.

***

For the Internet companies named in reports on NSA surveillance, their bottom line is at risk because European markets are crucial for them. It is too early assess the impact on them, but the stakes are clearly huge. For example, Facebook has about 261 million active monthly European users, compared with about 195 million in the U.S. and Canada, and 22% of Apple’s net income came from Europe in the first quarter of 2013.

***

In June 2011, Microsoft admitted that the United States could bypass EU privacy regulations to get vast amounts of cloud data from their European customers. Six months later, BAE Systems, based in the United Kingdom, stopped using the company’s cloud services because of this issue.

***

The NSA scandal has brought tensions over spying to a boil. German prosecutors may open a criminal investigation into NSA spying. On July 3, Germany’s interior minister said that people should stop using companies like Google and Facebook if they fear the U.S. is intercepting their data. On July 4, the European Parliament condemned spying on Europeans and ordered an investigation into mass surveillance. The same day, Neelie Kroes, the EU’s chief telecom and Internet official, warned of “multi-billion euro consequences for American companies” because of U.S. spying in the cloud.

***

Transparency is an important first step. Its absence only exacerbates a trust deficit that companies already had in Europe. And trust is crucial. Google’s chief legal officer recognized this on June 19 when he said, “Our business depends on the trust of our users,” during a Web chat about the NSA scandal. Some companies have been aggressive in trying to disclose more, and others have not. But unless the U.S. government loosens strictures and allows greater disclosure, all U.S. companies are likely to suffer the backlash.

***

The Obama administration needs to recognize and mitigate the serious economic risks of spying while trying to rebuild its credibility on Internet freedom. The July 9 hearing of the Privacy and Civil Liberties Oversight Board is a start, but much more is needed. More disclosure about the surveillance programs, more oversight, better laws, and a process to work with allied governments to increase privacy protections would be a start.

The European customers of Internet companies are not all al Qaeda or criminals, but that is essentially how U.S. surveillance efforts treat them. If this isn’t fixed, this may be the beginning of a very costly battle pitting U.S. surveillance against European business, trade, and human rights.

The Atlantic notes:

Most communications flow over the Internet and a very large percentage of key Internet infrastructure is in the United States. Thus, foreigners’ communications are much more likely to pass through U.S. facilities even when no U.S. person is a party to a particular message. Think about a foreigner using Gmail, or Facebook, or Twitter — billions of these communications originate elsewhere in the world but pass through, and are stored on, servers located in the U.S.

***

Foreigners … comprise a growing majority of any global company’s customers.

***

From the perspective of many foreign individuals and governments, global Internet companies headquartered in the U.S. are a security and privacy risk. And that means foreign governments offended by U.S. snooping are already looking for ways to make sure their citizens’ data never reaches the U.S. without privacy concessions. We can see the beginnings of this effort in the statement by the vice president of the European Commission, Viviane Reding, who called in her June 20 op-ed in the New York Times for new EU data protection rules to “ensure that E.U. citizens’ data are transferred to non-European law enforcement authorities only in situations that are well defined, exceptional and subject to judicial review.” While we cheer these limits on government access, the spying scandal also puts the U.S. government and American companies at a disadvantage in ongoing discussions with the EU about upcoming changes to its law enforcement and consumer-privacy-focused data directives, negotiations critical to the Internet industry’s ongoing operations in Europe.

Even more troubling, some European activists are calling for data-storage rules to thwart the U.S. government’s surveillance advantage. The best way to keep the American government from snooping is to have foreigners’ data stored locally so that local governments – and not U.S. spy agencies — get to say when and how that data may be used. And that means nations will force U.S.-based Internet giants like Google, Facebook, and Twitter, to store their user data in-country, or will redirect users to domestic businesses that are not so easily bent to the American government’s wishes.

So the first unintended consequence of mass NSA surveillance may be to diminish the power and profitability of the U.S. Internet economy. America invented the Internet, and our Internet companies are dominant around the world. The U.S. government, in its rush to spy on everybody, may end up killing our most productive golden goose.

San Diego Union-Tribune writes:

California and its businesses have a problem. It’s called the National Security Agency.

***

The problem for California is not that the feds are collecting all of our communications. It is that the feds are (totally unapologetically) doing the same to foreigners, especially in communications with the U.S. California depends for its livelihood on people overseas — as customers, trade partners, as sources of talent. Our leading industries — shipping, tourism, technology, and entertainment — could not survive, much less prosper, without the trust and goodwill of foreigners. We are home to two of the world’s busiest container ports, and we are a leading exporter of engineering, architectural, design, financial, insurance, legal, and educational services. All of our signature companies — Apple, Google, Facebook, Oracle, Intel, Hewlett-Packard, Chevron, Disney — rely on sales and growth overseas. And our families and workplaces are full of foreigners; more than one in four of us were born abroad, and more than 50 countries have diaspora populations in California of more than 10,000.

***

News that our government is collecting our foreign friends’ phone records, emails, video chats, online conversations, photos, and even stored data, tarnishes the California and American brands.

***

Will tourists balk at visiting us because they fear U.S. monitoring? Will overseas business owners think twice about trading with us because they fear that their communications might be intercepted and used for commercial gain by American competitors? Most chilling of all: Will foreigners stop using the products and services of California technology and media companies — Facebook, Google, Skype, and Apple among them — that have been accomplices (they say unwillingly) to the federal surveillance?

The answer to that last question: Yes. It’s already happening. Asian governments and businesses are now moving their employees and systems off Google’s Gmail and other U.S.-based systems, according to Asian news reports. German prosecutors are investigating some of the American surveillance. The issue is becoming a stumbling block in negotiations with the European Union over a new trade agreement. Technology experts are warning of a big loss of foreign business.

John Dvorak, the PCMag.com columnist, wrote recently, “Our companies have billions and billions of dollars in overseas sales and none of the American companies can guarantee security from American spies. Does anyone but me think this is a problem for commerce?”

***

It doesn’t help when our own U.S. Sen. Dianne Feinstein is backing the surveillance without acknowledgment of the huge potential costs to her state.

It’s time for her and House Minority Leader Nancy Pelosi, who has been nearly as tone-deaf on this issue, to be forcefully reminded that protecting California industry, and the culture of openness and trust that is so vital to it, is at least as important as protecting massive government data-mining. Such reminders should take the force not merely of public statements but of law.

California has a robust history of going its own way — on vehicle standards, energy efficiency, immigration, marijuana. Now is the time for another departure — this one on the privacy of communications.

***

We need laws, perhaps even a state constitutional amendment, to make plain that California considers the personal data and communications of all people, be they American or foreign, to be private and worthy of protection.

And see this.

The bigger picture is that a country’s economic health is correlated with a strong rule of law more than any other factor.

Yet America has rapidly fallen into a state of lawlessness, where fundamental rights – such as protection against mass spying by the government – have been jettisoned.

The government is spying on just about everything we do.  Even the government’s attempted denials of this fact confirm it.

http://www.zerohedge.com/contributed/2013-07-31/nsa-spying-directly-harms-internet-companies-silicon-valley-california-%E2%80%A6-and-

The spying cheat sheet

Congress Is Holding Hearings on Government Spying … Here’s a Cheat Sheet

If you’ve been too busy to catch up on the details of the spying scandal, here’s an overview:

• The government is spying on just about everything we do.  Even the government’s attempted denials of this fact confirm it

• The government has adopted a secret interpretation of the Patriot Act which allows it to pretend that “everything” is relevant … so it spies on everyone

• The government’s mass spying doesn’t keep us safe

• NSA spying did not prevent a terror attack on Wall Street

• There is no real oversight by either Congress or the courts. And see this and this

• Even a Federal judge who was on the secret spying court for 3 years says that it’s a kangaroo court

• Experts say that the spying program is illegal, and is exactly the kind of thing which King George imposed on the American colonists … which led to the Revolutionary War

• A former U.S. president says that the spying program shows that we no longer have a functioning democracy

• We can keep everyone safe without violating the Constitution … more cheaply and efficiently than the current system

• The top counter-terrorism Czar under Clinton and Bush says that revealing NSA spying programs does not harm national security

• Whistleblowers on illegal spying have no “legal” way to get the information out

• A high-level intelligence source says “we hack everyone everywhere“

• Spying started before 9/11 … and may have stemmed from an emergency program only meant to be activated in the case of a nuclear war

• Governments and big corporations are doing everything they can to destroy anonymity

• Mass spying creates an easy mark for hackers

• Mass surveillance by the NSA directly harms internet companies, Silicon Valley, California … and theentire U.S. economy

• IT and security professionals are quite concerned about government spying

• Some people make a lot of money off of mass spying

• But the government isn’t using the spying program to stop the worst types of lawlessness

• Polls show that the public doesn’t believe the NSA

• While leaker Edward Snowden is treated as a traitor by the fatcats and elites, he is considered a heroby the American public

• While the Obama administration is spying on everyone in the country – it is at the same time themost secretive administration ever (background). That’s despite Obama saying he’s running the most transparent administration ever

• Top constitutional experts say that Obama and Bush are worse than Nixon … and the Stasi East Germans

• A Congressman noted that – even if a mass surveillance program is started for good purposes – it will inevitably turn into a witch hunt

• Surveillance can be used to frame you if someone in government happens to take a dislike to you

• Government spying has always focused on crushing dissent … not on keeping us safe

• An NSA whistleblower says that the NSA is spying on – and blackmailing – top government officials and military officers (and see this)

• High-level US government officials have warned for 40 years that mass surveillance would lead to tyranny in America

• A bill to stop NSA spying was narrowly defeated, momentum is building to rein in the programs, and Congressmen Holt and Grayson have introduced legislation to stop the mass surveillance

http://www.washingtonsblog.com/2013/07/cheat-sheet-on-spying-2.html

Shocking 'extermination' fantasies by the people running America's Empire on full display at Aspen Summit

Max Blumenthal
Alternet.org
Tue, 30 Jul 2013 08:51 CDT

Not "ogres", but certainly snakes in suits

Security Forum participants expressed total confidence in American empire, but could not contain their panic at the mention of Snowden.

Seated on a stool before an audience packed with spooks, lawmakers, lawyers and mercenaries, CNN's Wolf Blitzer introduced recently retired CENTCOM chief General James Mattis. "I've worked with him and I've worked with his predecessors," Blitzer said of Mattis. "I know how hard it is to run an operation like this."

Reminding the crowd that CENTCOM is "really, really important," Blitzer urged them to celebrate Mattis: "Let's give the general a round of applause."

Following the gales of cheering that resounded from the room, Mattis, the gruff 40-year Marine veteran who once volunteered his opinion that "it's fun to shoot some people,"outlined the challenge ahead. The "war on terror" that began on 9/11 has no discernable end, he said, likening it to the "the constant skirmishing between [the US cavalry] and the Indians" during the genocidal Indian Wars of the 19th century.

"The skirmishing will go on likely for a generation," Mattis declared.

Mattis' remarks, made beside a cable news personality who acted more like a sidekick than a journalist, set the tone for the entire 2013 Aspen Security Forum this July. A project of the Aspen Institute, the Security Forum brought together the key figures behind America's vast national security state, from military chieftains like Mattis to embattled National Security Agency Chief General Keith Alexander to top FBI and CIA officials, along with the bookish functionaries attempting to establish legal groundwork for expanding the war on terror.

Partisan lines and ideological disagreements faded away inside the darkened conference hall, as a parade of American securitocrats from administrations both past and present appeared on stage to defend endless global warfare and total information awareness while uniting in a single voice of condemnation against a single whistleblower bunkered inside the waiting room of Moscow International Airport: Edward Snowden.

With perhaps one notable exception, none of the high-flying reporters junketed to Aspen to act as interlocutors seemed terribly interested in interrogating the logic of the war on terror. The spectacle was a perfect window into the world of access journalism, with media professionals brown-nosing national security elites committed to secrecy and surveillance, avoiding overly adversarial questions but making sure to ask the requisite question about how much Snowden has caused terrorists to change their behavior.

Jeff Harris, the communications director for the Aspen Institute, did not respond to questions I submitted about whether the journalists who participated in the Security Forum accepted fees. (It is likely that all relied on Aspen to at least cover lodging and travel costs). CNN sponsored the forum through a special new website called CNN Security Clearance, promoting the event through Twitter and specially commissioned op-eds from participating national security figures like former CIA director John McLaughlin.

Another forum sponsor was Academi, the private mercenary corporation formerly known as Blackwater. In fact, Academi is Blackwater's third incarnation (it was first renamed "Xe") since revelations of widespread human rights abuses and possible war crimes in Iraq and Afghanistan threw the mercenary firm into full damage control mode. The Aspen Institute did not respond to my questions about whether accepting sponsorship from such an unsavory entity fit within its ethical guidelines.

'Exterminating People'

John Ashcroft, the former Attorney General who prosecuted the war on terror under the administration of George W. Bush, appeared at Aspen as a board member of Academi. Responding to a question about U.S. over-reliance on the "kinetic" approach of drone strikes and special forces, Ashcroft reminded the audience that the U.S. also likes to torture terror suspects, not just "exterminate" them.

"It's not true that we have relied solely on the kinetic option," Ashcroft insisted. "We wouldn't have so many detainees if we'd relied on the ability to exterminate people...We've had a blended and nuanced approach and for the guy who's on the other end of a Hellfire missile he doesn't see that as a nuance."

Hearty laughs erupted from the crowd and fellow panelists. With a broad smile on her face, moderator Catherine Herridge of Fox News joked to Ashcroft, "You have a way with words."

But Ashcroft was not done. He proceeded to boast about the pain inflicted on detainees during long CIA torture sessions: "And maybe there are people who wish they were on the end of one of those missiles."

Competing with Ashcroft for the High Authoritarian prize was former NSA chief Michael Hayden, who emphasized the importance of Obama's drone assassinations, at least in countries the U.S. has deemed to be Al Qaeda havens. "Here's the strategic question," Hayden said. "People in Pakistan? I think that's very clear. Kill 'em. People in Yemen? The same. Kill 'em."

"We don't smoke [drug] cartel leaders but personally I'd support it," remarked Philip Mudd, the former deputy director of Bush's Counterterrorism Center, earning more guffaws from his fellow panelists and from Herridge. Ironically, Mudd was attempting to argue that counter-terror should no longer be a top U.S. security priority because it poses less of a threat to Americans than synthetic drugs and child obesity.

Comment: These same people and institutions have been and are responsible for producing and pushing those drugs: Opium and the CIA: Can the U.S. triumph in the drug-addicted Afghanistan War?

Reflection was not on the agenda for most of the Security Forum's participants. When asked by a former US ambassador to Denmark the seminal question "This is a great country, why are we always the bad guy?," Mudd replied, "They think that anything the U.S. does [in the Middle East], even though we helped Muslim communities in Bosnia and Kuwait, everything is rewritten to make us the bad guys."

The clamoring about U.S. invasions, drone strikes, bankrolling of Israel's occupation, and general political meddling, could all be written off as fevered anti-Americanism borne from the desert canyons of the paranoid Arab mind.

And the wars could go on.

Delusions of Empire

Throughout the three days of the Security Forum, the almost uniformly white cast of speakers were called on to discuss recent geopolitical developments, from "Eye-rak" and "Eye-ran" to Egypt, where a military coup had just toppled the first elected government in the country's history.

Mattis carefully toed the line of the Obama administration, describing the overthrow of Egypt's government not as a coup, but as "military muscle saddled on top of this popular uprising."

Warning that using terms like "coup" could lead to a reduction in U.S. aid to Egypt, where the military controls about one-third of the country's economy, Mattis warned, "We have to be very careful about passing laws with certain words when the reality of the world won't allow you to."

Comment: Funny how the iron 'Rule of Law' bends in the minds of these authoritarian followers and psychopaths...

Wolf Blitzer mentioned that Egypt's new military-imposed foreign minister, Nabil Fahmy, had been a fixture in Washington during the Mubarak days. "These are people the West knows, the U.S. knows," he said of the new cabinet in Cairo. "I assume from the U.S. perspective, the United States is so much more happy with this."

Later, one of the few Arab participants in the forum, Al Jazeera DC bureau chief Abderrahim Foukara, claimed that the Arab revolts were inspired by the U.S. invasion of Iraq. "The iconic image of Saddam being pulled out of a hole did something to the dynamic between ruler and ruled in the Arab world," Foukara claimed.

With the revolts blurring the old boundaries imposed on the Arab world during the late colonial era, former CIA director John McLaughlin rose from the audience to call for the U.S. to form a secret, Sikes-Picot-style commission to draw up a new set of borders.

"The American government should now have such a group asking how we should manage those lines and what should those lines be," McLaughlin told the panelists, who dismissed the idea of a new Great Game even as they discussed tactics for preserving U.S. dominance in the Middle East.

ABC's Chris Isham asked Jim Jeffrey, the former U.S. ambassador to Iraq, why, with a recession on its hands and Middle Eastern societies spiraling out of control, should the U.S. remain militarily involved in the region. Without hesitation, Jeffrey rattled off the reasons: Saudi Arabia, Turkey, Israel, and "world oil markets."

Comment: What, nothing about 'fighting terrorists over there so we don't have to fight them at home'? And what happened to 'spreading freedom and democracy'?

"What could we have done better?" Isham asked the ambassador.

"Probably not too much."

NSA Heroes, Saving Lives of Potential Consumers

While participants in the Security Forum expressed total confidence in American empire, they could not contain their panic, outrage, and fear at the mere mention of Snowden.

General Keith Alexander selling fuzzy wuzzies to brainwashed Americans

"Make no mistake about it: These are great people who we're slamming and tarnishing and it's wrong. They're the heroes, not this other and these leakers!" NSA chief General Keith Alexander proclaimed, earning raucous applause from the crowd.

Snowden's leaks had prompted a rare public appearance from Alexander, forcing the normally imperious spy chief into the spotlight to defend his agency's Panopticon-style programs and its dubious mechanisms of legal review. Fortunately for him, NBC's Pete Williams offered him the opportunity to lash out at Snowden and the media that reported the leaks, asking whether the "terrorists" (who presumably already knew they were being spied on) had changed their behavior as a result of the leaks.

"We have concrete proof that terrorists are taking action, making changes, and it's gonna make our job harder," Alexander declared, offering nothing to support his claim.

Alexander appeared in full military regalia, with colorful decorations and medallions covering his left breast. Casting himself as a stern but caring father who has the best interests of all Americans at heart, even if he can't fully disclose his methods, he turned to the crowd and explained,"The bad guys...hide amongst us to kill our people. Our job is to stop them without impacting your civil liberties and privacy and these programs are set up to do that."

Comment: The "bad guys", seriously?!

"The reason we use secrecy is not to hide it from the American people, but to hide it from the people who walk among you and are trying to kill you," Alexander insisted.

Comment: LIES! The people succeeding at controlling (and often killing) Americans are walking among us, like the snakes in suits at such rallies as the Aspen Institute Security Forum.

Corporations like AT&T, Google and Microsoft that had been compelled to hand over customer data to the NSA "know that we're saving lives," the general claimed. With a straight face, he continued, "And that's good for business because there's more people out there who can buy their products."

Self-Reporting

So who were the "bad guys" who "walk among us," and how could Americans be sure they had not been ensnared by the NSA's all-encompassing spying regime, either inadvertently or intentionally? Nearly all the Security Forum participants involved in domestic surveillance responded to this question by insisting that the NSA had the world's most rigorous program of oversight, pointing to Congress and the Foreign Intelligence Surveillance Act (FISA) courts as the best and only means of ensuring that "mistakes" are corrected.

"We have more oversight on this [PRISM] program than any other program in any government that I'm aware of," Alexander proclaimed, ramming home a talking point repeated throughout the forum.

"I can assure these are some of the judges who are renowned for holding the government to a very high standard," John Carlin, the Assistant US Attorney General for National Security, stated.

But in the last year, FISA courts received 1,856 applications for surveillance from the government. In 100 percent of cases, they were approved.As for Congress, only two senators, Ron Wyden and Mark Udall, demanded the NSA explain why PRISM was necessary or questioned its legality. Despite the fact that the entire regime of oversight was a rubber stamp, or perhaps because of it, none of those who appeared at the Security Forum to defend it were willing to consider any forum of independent civilian review.

"You have to do [domestic surveillance] within a closed bubble in order to do it effectively," Dennis Blair, the director of National Intelligence conceded under sustained grilling from the Washington Post's Barton Gellman, one of the reporters who broke Snowden's leaks and perhaps the only journalist at the Security Forum who subjected participants to tough scrutiny.

When Gellman reminded Alexander that none of the oversight mechanisms currently in place could determine if the NSA had improperly targeted American citizens with no involvement in terror-related activity, the general declared, "we self-report those mistakes."

"It can't be, let's just stop doing it, cause we know, that doesn't work," Alexander maintained. "We've got to have some program like [PRISM]."

The wars would go on, and so would the spying.

Reinstituting Public Confidence

During a panel on inter-agency coordination of counter-terror efforts, Mike Leiter, the former director of the National Counterterrorism Center (NCC), suggested that one of the best means of preserving America's vast and constantly expanding spying apparatus was "by reinstituting faith among the public in our oversight."

Even as current NCC director Matthew Olsen conceded, "There really are limits in how transparent we can be," Leiter demanded that the government "give the public confidence that there's oversight.

Since leaving the NCC, Leiter has become the senior counsel of Palantir Technologies, a private security contractor that conducts espionage on behalf of the FBI, CIA, financial institutions, the LAPD and the NYPD, among others. In 2011, Palantir spearheaded a dirty tricks campaign against critics of the U.S. Chamber of Commerce, including journalists, compiling electronic dossiers intended to smear them. Palantir's target list included progressive groups like Think Progress, SEIU and U.S. Chamber Watch.

In the friendly confines of the Aspen Institute's Security Forum, Leiter did his best to burnish his company's tarnished image, and do some damage control on behalf of the national security apparatus it depends on for contracts. Like most other participants, Leiter appeared in smart casual dress, with an open collar, loafers, a loose-fitting jacket and slacks.

"Just seeing us here," he said, "that inspires [public] confidence, because we're not a bunch of ogres."

Comment: No, they not ogres, like most psychopaths in positions of power, they are well-dressed, affable, charming even, but they can't help exposing their psychopathic nature when they speak with glee about "exterminating" and torturing normal human beings.

http://www.sott.net/article/264484-Shocking-extermination-fantasies-by-the-people-running-Americas-Empire-on-full-display-at-Aspen-Summit

What Happens When The Oil Runs Out?

Authored by Professor Chris Rhodes via OilPrice.com [14],

Summary of a lecture by Professor Chris Rhodes to the Conway Hall Ethical Society, Conway Hall, Red Lion Square, London. 11.00 am, Sunday July 28th, 2013.
The world supply of crude oil isn’t going to run out any time soon, and we will be producing oil for decades to come. However, what we won’t be doing is producing crude oil – petroleum – at the present rate of around 30 billion barrels per year. For a global civilization that is based almost entirely on a plentiful supply of cheap, crude oil, this is going to present some considerable challenges. If we look over a 40 year period, from 1965 to 2005, we see that by the end of it, humanity was using two and a half times as much oil, twice as much coal and three times as much natural gas, as at the start, and overall, around three times as much energy: this for a population that had “only” doubled. Hence our individual average carbon footprint had increased substantially – not, of course, that this increase in the use of energy, and all else, was by any means equally distributed across the globe.
From the latest document that I can find – the B.P. Statistical Review – we see that the majority form of energy used by humans on earth is crude oil, accounting for 33% of our total, closely followed by coal at 30%: a figure that is rapidly catching up with oil, as coal is the principal and increasing source of energy in developing nations such as China and India. Natural gas follows in a close third place, at 24%; nuclear and hydroelectric power at 5-6% each; and the tiny fraction of our overall energy that comes from “renewables”, is just 1.6%. Thus, we are dependent on the fossil fuels for 87% of our energy. Now, such a comparison is almost misleading and naïve, because it tacitly presumes that if our oil supply becomes compromised, we can make a simple substitution for it using some other energy source.
However, this is not so readily done in practice, because oil is a particular and unique substance, having both a high energy content, and that it is readily refined into liquid fuels – effectively by distillation – to provide the petrol and diesel that runs practically all of the world’s transportation. Moreover, everything we depend upon - literally everything: food, materials, clothes, computers, mobile phones, pharmaceuticals etc. – for our daily existence is underpinned by a plentiful supply of cheap crude oil. So, the loss of this provision is going to have a profound, and shattering effect on human civilization.
In the “good old days”, e.g. the Humphrey Jones “Giant Gusher” drilled in Texas in 1922, it was necessary only to drill a hole in the ground to get oil. An oil well contains not only oil, but gas at high pressure, meaning that once the cap-rock that holds it all in place is broken, the oil is forced out in that familiar jet of black gold. The good old days indeed, because then it was necessary only to expend an amount of energy equal to that contained in one barrel of oil to recover a hundred barrels, which is like investing a pound and getting a return of a hundred pounds – a very good net profit. In 2013, the return is maybe twenty pounds or just three for extra-heavy oil, or for “oil” derived from tar sands, once it has been upgraded into liquid fuel.
Of greatest concern is how much oil is remaining. As noted, we currently use 30 billion barrels a year – 84 million barrels a day, or a thousand barrels every second. When it is trumpeted about some new and huge find of oil, e.g. the Tupi field off Brazil, thought to contain 8 billion barrels, in reality this is only enough to run the world for three months. Context should not be lost in these matters. The quality of the oil is also at issue. For example, much of the remaining oil is of the “heavy”, “sour” kind, meaning that it is not necessarily liquid at all, but bitumen, and contains relatively high levels of sulphur, necessitating complex and energy-intensive processing to get the sulphur out – which would otherwise be corrosive toward the steel used in the refinery – and to crack the heavier material into lighter fractions that can be used as fuel, or as feedstocks for industry.
So, it’s not just that we have got through much of our original bestowal of oil, but that what remains is of poorer quality – in other words, we have used-up most of the “good stuff”! Oil shale is not oil at all, but contains a material called “kerogen” which is a solid and needs to be heated to five hundred degrees Centigrade to break it down into a liquid form that in any way resembles what we normally think of as “oil”. So, when it is claimed that there are “three trillion barrels” of oil under America, really this is only to encourage voters and investors, because the actual Energy return on Energy Invested (EROEI) is so poor that there has been no serious commercial exploitation of oil shale to date, and probably there never will be.
Not only are we entirely dependent on crude oil for all our fuel and materials, but without cheap crude oil, and natural gas to make nitrogen fertilizers, we could grow no food. If we look at a field of soya beans being harvested in Brazil, we see a number of features. For one, those beans are not consumed at source, but are transported around Brazil and around the world. So, oil-derived fuels are necessary not only to run the tractors and combine harvesters, but the trucks, ships and planes to move the crop onto the world markets. In addition, we see the vast clouds of dust being thrown up behind the marching array of mighty machines – combine harvesters – which represents the loss of top-soil.
Even if we could solve all our energy problems, we are consuming the living and fragile portion of the earth’s surface that is our soil, and upon which we are utterly dependent to grow any food at all. We have “lost” around one third of our soil in the past half century - much of this through unsound and unsustainable agricultural practices - which does not bode well for the survival of a burgeoning human population. Another feature is that this land was once rain forest, which has been cleared to use the land for farming.
This is done either simply by setting fire to the forest, or by more exquisite means, such as taking a ship’s anchor chain, four hundred feet long - and if it is two inches in diameter, weighing five tonnes – then stringing it between two one hundred tonne tractors and simply driving over the terrain, so that the chain rips through everything that is there, tearing the trees out by their roots and destroying the structure of the soil in the process. The upshot is that the soil becomes unproductive within only a few years and so it is necessary to move on and do the same thing elsewhere.
In Britain we import about 40% of what we eat, and we use around 7 million tonnes of crude oil each year to fuel our food-chain. It can be said that we literally “eat oil”.
The concept of “Peak Oil” is due to Marion King Hubbert, a petroleum geologist working for the Shell Development Company in Texas, who predicted that oil production in America would peak in 1970. At that time, Texas was “awash” with oil – America being the world’s major oil-exporting nation then - and so no one took him seriously: but when in 1970, he was proved correct, Hubbert’s Peak entered the realm both of hard science and folklore. According to Hubbert, there is a 40 year lag between the year of peak discovery and that of peak production. If we apply this to the world situation, where global oil discovery peaked in 1965, we expect a global production in 2005. Indeed world production of oil has been on a flat line since 2005, and it is thought that we are at the production limit.
The price of oil has quadrupled in the past 10 years, reflecting the more strenuous efforts that are necessary to maintain production: deepwater drilling, fracking, tar sands, all of which have much lower energy returns than for conventional crude oil. Indeed, oil that is recovered from fracking costs about $105 a barrel to produce which until recently was more than it could be sold for. However, the price of oil is creeping up, and the industry is prepared to bear the loss for now, because it knows that the price of a barrel of oil will shortly rocket, and having cornered this “new” portion of the industry, will make big profits. Oil companies are not charities, after all. I emphasis the word “new” because fracking – properly called hydraulic fracturing – has been around since 1947: what is new is the combination of this technique with horizontal drilling, meaning that porous but impermeable rocks can be drilled-out laterally, then “fracked” to break them open thus releasing the oil or gas that they contain.
Fracking is a controversial matter, and there are grave concerns about groundwater contamination from the process. It is not only the fear that the chemicals that were originally present in the fracking fluid might migrate upward into the water table, but that other toxic materials, e.g. radon, that were confined safely within the natural prevailing geology, might be exhumed too. The Royal Society (U.K. equivalent of a national academy of sciences) has concluded that the procedure is safe, so long as it is strictly regulated, but how can this be guaranteed, when profits are the order of the day, and if the technology is to be employed across the world?
What too will become of the millions of gallons of contaminated water, injected under great pressure into the wells to fracture the rock, that remains? Will this be disposed of safely or simply left behind, potentially to leak into and contaminate the groundwater and the soil? This would be a tragic and cruel legacy for future generations.
Analyses made by both the International Energy Administration (IEA; effectively part of the U.S. Department of Energy) and its counterpart organisation, the Paris-based Energy Information Agency (EIA), concur that we will have lost around half our production of conventional crude oil by 2030. This is equivalent to four times the present output of Saudi Arabia, and it seems highly unlikely that this gap in supply can be filled from unconventional sources. Since we are entirely dependent on crude oil to fuel the world’s transportation, and looking at the amount of oil we are likely to be left with, we may conclude that it will be necessary to curb transportation by about 70% over the next 20 years.
This means the loss mainly of personalized transport and it is unfeasible that there will be 34 million electric cars in the U.K. (the current number of oil-fuelled cars) any time soon, and in reality, never. The only sensible means to move people around using electric power is by light rail and tramways, i.e. mass-transit systems.
If we can’t address the problem from the supply side we have to curb our demand. In the absence of cheap and widely accessible transport we will need to produce far more of our food and materials at the local level. Such a metamorphosis of human civilization from the global to the local, will be underpinned by building strong, resilient communities in which people share their skills and knowledge, to provide as much as possible at the local, grass-roots level. This is the underpinning philosophy of the growing network of Transition Towns. Frightening though all of this is, we may evolve into a happier and more fulfilling state of living than a perceived status quo, that in truth is all too rapidly running through our fingers.

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