Ruminations, June 9, 2013
Trading off privacy for security
“You can’t have 100 percent security and then also have 100 percent privacy and zero inconvenience,” said President Barack Obama. He’s right. There are trade-offs, pure and simple.
Last week, The Guardian (A left-leaning, London-based newspaper) reported that the National Security Administration (NSA), in cooperation with other branches of the government and private agencies, captured information on private U.S. citizens’ telephone calls. The Guardian subsequently reported that Internet communications were also captured.
Fox News reported that these revelations had done what no one else has been able to do for years: It united the far left and the far right. Both The New York Times and Rush Limbaugh have criticized the administration for these steps (though in Limbaugh’s defense, he added that the totality of the recent actions by the administration – IRS scandals, AP phone-call records, etc. — must be taken into account).
“In a rush to publish,” Obama said last week, “media outlets have not given the full context including the extent to which these programs are overseen by all three branches of government ….” Well, that’s partly right. But even when there is not a “rush to publish,” the media often takes a sanctimonious “why not publish” attitude. This was clearly evident during the George W. Bush administration when the New York Times editor Bill Keller listened to administration arguments against publishing how terrorist financial transactions were being monitored and published anyway – with predictable results.
But the world is getting more complex. The latest revelations were published by a British newspaper over which the United States has no control or influence. But it gets even more complex in that the NSA shares data with Britain’s Government Communications Headquarters (GCHQ). The Times itself was unclear if data obtained by the government from the Internet was domestic or foreign. It makes little difference since the data was shared with GCHQ; what’s domestic to us would be foreign to them.
The crux of the matter is how much of a real threat to civil liberties is the gathering of telephone call information? In old television reruns of Law and Order, detectives Lennie Briscoe and Ed Green frequently ordered some “luds” (local usage directory), which give a brief history of all calls made from a specific phone. This is similar to the NSA’s capturing of phone data from non-suspecting Americans. It is different in that police need a judge’s order for a specific (albeit uncharged) person, while NSA gets data on everyone.
How does the public feel about it? According to Rasmussen, 26 percent think that gathering the data is fine, while 59 percent would rather see it stopped. Part of the negative reactions may be due to the facts that this is a recent revelation and still not well understood, it is coming on the heels of other scandals, and it is being portrayed by the press in a tabloid-like manner.
The Times June 6 editorial, “President Obama’s Dragnet,” said the NSA surveillance “is the very sort of thing against which Mr. Obama once railed, when he said in 2007 that the surveillance policy of the George W. Bush administration ‘puts forward a false choice between the liberties we cherish and the security we provide.’” Obama was chided for carrying on and expanding the policies of Bush. Evidently, the Times does not believe that Obama can grow and learn in office – the United States has had a remarkable record on safety since September 11, 2001.
Nonetheless, there are questions that are being asked by responsible people. Has the administration been forthcoming about the surveillance program? Do the legislative and judicial branches have enough expertise and time to adequately supervise this executive program? Has the administration been honest in its testimony before congress? What threat do these programs represent to the rights of Americans?
“One of the things we’re going to have to discuss and debate is, how are we striking this balance between the need to keep the American people safe and our concerns about privacy … there are some trade-offs involved,” Obama said. “I welcome this debate, and I think it’s healthy for our democracy.” Right again, Mr. President.
The operation was a success but the patient died.
In Europe, the euro is a success but the economy is dying.
In a modern economy the purpose of a currency is to facilitate economic transactions. To have a currency that maintains its value and one that is widely acceptable is not an end in itself but an integral part of the economy. But sometimes there are trade-offs.
As the European economy evolved after World War II from a common steel and coal community to a common market, the idea gradually came about for a common currency that would serve across the continent. No longer would people have to be concerned about exchange rates especially when transactions took place among more than two countries. Even better, manufacturing of complex products such as airplanes could be easily priced even when suppliers resided in multiple countries. And more important, from a prestige perspective anyway, Europe would no longer be reliant on the eurodollar (U.S. dollars deposited in foreign banks – 90 percent of all international finance was via eurodollars just prior to the inception of the euro).
The euro looked like a stroke of genius and it was — for a while. The creators of the euro met in Maastricht, Netherlands, and signed the Maastricht Treaty in 1992. The euro exceeded expectations for 15 years: As long as representative governments could lie to the governing councils, not get caught or have a substantive effect on the euro zone, all was good. But you know that you can lie about running up debt for just so long before you get caught.
When a country piles up debt, normally the value of its currency sinks. A cheaper currency generally leads to the country’s exports becoming cheaper and it then begins to earn more money leading to a reduced debt. Another attribute of a country in debt is high inflation. As the currency inflates, the country’s debt becomes more manageable because it pays down the debt with a cheaper (inflated) currency.
None of the normal courses of action in the preceding paragraph are without pain – the value of savings and life insurance plummets, imports become more expensive (a problem especially with oil imports), trade wars may develop, and interest rates soar in anticipation of more inflation. But the pain eventually passes. Had the euro not existed, in all probability, Greece, Spain, Portugal, Italy, Ireland and others would be on the road to recovery now.
Unfortunately, the economic health of these countries at present stinks. A contributory factor is that the European Central Bank and other euro stakeholders are forcing the euro to retain its value. Hence these countries do not have the trade export advantage of a cheap currency nor do they have the advantage of paying down their debt with a cheaper currency. At the same time, they have the disadvantage of having austerity programs thrust upon them by the euro-haves. All this is done to save a currency and to heck with the economies of the euro-have-nots.
If, however, these countries were to pull out of the euro, the value of the euro would drop and leave all holders of the euro (foreign and European) holding a currency of diminishing value – and they would sell the euro, dropping its value even further. The problems of inflation, high interest rates, more expensive energy imports, etc. would prevail across the entire euro zone – including those countries that are relatively strong economically (e.g., Germany, the Netherlands, Denmark). It would also impact other countries outside the euro zone by reducing the value of their euro holdings and slowing trade. That’s why the strong euro zone countries continue to bail out the weaker ones, all the while complaining about the profligacy of the weaker countries.
So the euro will continue. And the euro will continue to be one of the world’s most successful currencies as Europe suffers.
Quote without comment
Jay Leno on the Tonight Show, June 3, 2013: “President Obama says that he wants to renew his efforts to close down Guantanamo Bay. He should close down the IRS. Or, how about shipping the IRS to Guantanamo Bay?