Republican Presidents and Jobs

The graphics with this New York Times Op-Ed piece are the most direct and convincing evidence I've seen about the effects that Republican Presidents have historically had on jobs, and comparing Bush's results with Obama's.  Romney has not given any changes that he would make to Bush's policies, nor criticized them in any way that I am aware of.

http://nyti.ms/NfQshn

Either Romney is lying through his teeth when he criticizes Obama's handling of the economy, is abysmally ignorant of economics, and/or cares only about the economy of the richest Americans, rather the economy that 99% of us live in.

More reporters should do this kind of research, rather than taking his outrageous claims at face value.

How fast are the very rich getting richer at the expense of the rest of us?

It's rather hard to visualize the magnitude of the transfer of wealth that is taking place.

Here are some graphics developed by Forensic Accounting that help in the visualization:


Created by: www.ForensicAccounting.net

The first word of "don't be evil" actually matters!

Google started its journey towards the dark side back when they bought DoubleClick. Now the have announced a giant step in that direction. I've switched search engines and am retiring my Google+ account, and will try to live without Google Maps. I never did trust gmail...

The more you check, the more errors you find.

Freedom to Tinker has a good post by Ed Felten on a discovery by the Humboldt County Election Transparency Project, as reported in Wired.

Election officials in a small county in California discovered by chance last week that the tabulation software they used to tally votes in this year's general election dropped 197 paper ballots from the totals at one precinct. The system's audit log also appears to have deleted any sign that the ballots had ever been recorded.

Yes, the vendor was Premier Election Solutions (formerly known as Diebold), and yes, it was (at least) a software bug that persisted over numerous versions of their system.

Apparently, Diebold/Premier optical scan systems aren't that much more trustworthy than their direct recording electronic (DRE) voting machines.

At least they had paper ballots to check against. Making them available on the Web is a brilliant policy stroke.

The Tan Sox Explanation

The December 1 issue of The New Yorker has an excellent article by John Cassidy about Ben Bernanke, chairman of the Federal Reserve Bank. It contains a brief anecdote that I think provides a pretty good illustration of why George Bush has been able to preside so nonchalantly over the greatest financial debacle of his (or my) lifetime.

In June, 2005, Bernanke was sworn in at the Eisenhower Executive Office Building. One of his first tasks was to deliver a monthly economics briefing to the President and the Vice-President. After he and Hubbard sat down in the Oval Office, President Bush noticed that Bernanke was wearing light-tan socks under his dark suit. “Where did you get those socks, Ben?” he asked. “They don’t match.” Bernanke didn’t falter. “I bought them at the Gap—three pairs for seven dollars,” he replied. During the briefing, which lasted about forty-five minutes, the President mentioned the socks several times.

The following month, Hubbard’s deputy, Keith Hennessey, suggested that the entire economics team wear tan socks to the briefing. Hubbard agreed to call Vice-President Cheney and ask him to wear tan socks, too. “So, a little later, we all go into the Oval Office, and we all show up in tan socks,” Hubbard recalled. “The President looks at us and sees we are all wearing tan socks, and he says in a cool voice, ‘Oh, very, very funny.’ He turns to the Vice-President and says, ‘Mr. Vice-President, what do you think of these guys in their tan socks?’ Then the Vice-President shows him that he’s wearing them, too. The President broke up.”

If you can fully occupy your mind with the color of officials' socks, what need to clutter it up with information about the nation's economy?

"The economy is fundamentally sound."

Déjà vu (history, comments and contemporary quotations):

12/31: New York Times Industrials close at 331.



June
New York Times Industrials gain 52 to close at 391.



July
New York Times Industrials gain 25 to close at 416.



August
New York Times Industrials gain 33 to close at 449.



September
9/3: New York Times Industrials close at 452.
In retrospect, the great bull market of the decade comes to an end.

9/5: Market unevenness, with a slight downward trend, starts and continues until mid-October.



October
Tuesday 10/15: “The industrial condition of the United States is absolutely sound, … and nothing can arrest the upward movement… The markets generally are now in a healthy condition … values have a sound basis in the general prosperity of our country.” —Charles E. Mitchell, President of National City Bank

“Stock prices have reached what looks like a permanently high plateau… There may be a recession in stock prices, but not anything in the nature of a crash… I expect to see the stock market a good deal higher than it is today within a few months.” — Prof. Irving Fisher of Yale

Friday 10/18: New York Times Industrials close down 7.

Saturday 10/19: New York Times Industrials close down 12.

Sunday 10/20: The newspapers agree, and this is also the informed view on Wall Street, that the worst is over. And it is predicted that tomorrow the market will begin to receive organized support… Never was there a phrase with more magic than “organized support.” Almost immediately it was on every tongue and in every news story about the market.

Yet the Sabbath pause had a marked tendency to breed uneasiness and doubts and pessimism and a decision to get out on Monday.

Monday 10/21: A very poor day. Things were bad, but still not hopeless. Toward the end of Monday’s trading the market rallied and final prices were above the lows for the day. The net losses were considerably less than on Saturday.

“The decline represents only a shaking out of the lunatic fringe.” —Irving Fisher

Tuesday 10/22: New York Times Industrials close at 415. A somewhat shaky gain.

“The decline has gone too far.” —Charles E. Mitchell

Wednesday 10/23: New York Times Industrials close down 31 at 384.
That afternoon and evening thousands of speculators decided to get out while—as they mistakenly supposed—the getting was good.

There was also one bit of cheer. It was predicted that on the morrow the market would surely begin to receive “organized support.”

Thursday 10/24: New York Times Industrials close down 12 at 372.
The first of the days which history—such as it is on the subject—identifies with the panic… In New York at least the panic was over by noon.

This was it. The bankers, obviously, had moved in. The effect was electric. Fear vanished and gave way to concern lest the new advance be missed. Prices boomed upward… In its own way, the recovery on Black Thursday was as remarkable as the selling that made it so black… Many had good reason to be grateful to the financial leaders of Wall Street.

Representatives of thirty-five of the largest wire houses assembled at the offices of Hornblower and Weeks and told the press on departing that the market was “fundamentally sound” and “technically in better condition than it has been in months.” It was the unanimous view of those present that the worst had passed. The host firm dispatched a market letter which stated that “commencing with today’s trading the market should start laying the foundation for the constructive advance which we believe will characterize next year.”

“The trouble is purely technical and fundamentals remained unimpaired.” —Charles E. Mitchell

“There is nothing in the business situation to justify any nervousness.” —Eugene M. Stevens, President of the Continental Illinois Bank

“There has been no fundamental change in the oil business to justify concern.” —Walter Teagle

“The steel business has been making fundamental progress toward stability and this fundamentally sound condition is responsible for the prosperity of the industry.” —Charles M. Schwab [“Talk to Chuck”]

“The fundamental business of the country, that is production and distribution of commodities, is on a sound and prosperous basis.” —President Herbert Hoover

“It is undoubtedly beneficial to the business interests of the country to have the gambling type of speculator eliminated.” —Howard C. Hopson, head of Associated Gas and Electric

“There has been a lot of short selling, a lot of forced selling, and a lot of selling to make the market look bad.” —Wall Street Journal

Friday 10/25: Heavy trading, prices slightly up.

Saturday 10/26: New York Times Industrials close at 367.
Heavy treading, prices slightly down

Sunday 10/27: “The financial community now feels secure in the knowledge that the most powerful banks in the country stood ready to prevent a recurrence of panic… and has relaxed its anxiety.” —New York Times

Almost everyone believed that the heavenly knuckle-rapping was over and that speculation could be now resumed in earnest. The papers were full of the prospects for next week’s market. Stocks, it was agreed, were again cheap and accordingly there would be a heavy rush to buy.

Monday 10/28: New York Times Industrials close down 49 at 318.
Volume was huge, losses were more severe. On this day there was no recovery.

The bankers assembled once more at Morgan’s… They were described as taking a philosophical attitude, and they told the press that the situation “retained hopeful features,” although these were not specified.

Tuesday 10/29: New York Times Industrials close down 43 at 275.
This was the most devastating day in the history of the New York stock market, and it may have been the most devastating day in the history of markets.

The losses would have been worse had there not been a closing rally.

In the first week the slaughter had been of the innocents. During this second week there is some evidence that it was the well-to-do and the wealthy who were being subjected to a leveling process comparable in magnitude and suddenness to that presided over a decade before by Lenin.

“President Hoover has said that the ‘fundamental business of the country’ is sound… The main point which I want to emphasize is the fundamental soundness of the great mass of economic activities.” —Dr. Julius Klein, Assistant Secretary of Commerce

Wednesday 10/30: New York Times Industrials close up 31 at 306.
Why this recovery occurred no one will ever know.

“General business conditions are unquestionably fundamentally sound.” —Waddill Catchings of Goldman, Sachs

“Believing that fundamental conditions of the country are sound … my son and I have for some days been purchasing sound common stocks” —John D. Rockefeller

Thursday 10/31: New York Times Industrials close up 21 at 327.



November
“A severe depression like that of 1920-21 is outside the range of probability.” —Harvard Economic Society Forecast

Saturday 11/2: Over the weekend the financial community had almost certainly been persuaded by its own organized and spontaneous efforts at cheer.

“Business is sound.” — Alfred P. Sloan, Jr., President of General Motors

“The present recession, both for stocks and business, is not the precursor of business depression.” —Harvard Economic Society

Sunday 11/3: “It was the psychology of panic. It was mob psychology, and it was not, primarily that the price level of the market was unsoundly high … the fall in the market was very largely due to the psychology by which it went down because it went down.” —Irving Fisher

Everyone was feeling cheerful but the public. As before and later, the weekend had been a time of thought, and out of thought had come pessimism and a decision to sell. So, as on other Mondays, no matter how cheerful the superficial portents, the selling orders poured in in volume.

Monday 11/4: New York Times Industrials close down 22.
“It is our belief and conviction that the general industrial and business condition of the country is fundamentally sound and it is essentially unimpaired.” —advertisement by the Commercial National Bank and Trust Company in the New York Times

Tuesday 11/5: Markets closed for election day.

Wednesday 11/6: New York Times Industrials close down 37.
Another sickening slide.

Thursday 11/7: Steady.

Friday 11/8: New York Times Industrials close at 274.
A small drop.

Monday-Wednesday 11/11-13: New York Times Industrials lose 50 to close at 224.

11/30: “Herbert Hoover is easily the most commanding figure in the modern science of ‘engineering statesmanship.’” —Philadelphia Record

“The nation is now aware that it has at the White House a man who believes not in the philosophy of drift, but in the dynamics of mastery.” —Boston Globe



December
“The steps we have taken re-established confidence.” —President Herbert Hoover

12/21: “A depression seems improbable; we expect recovery of business next spring, with further improvement in the fall.” —Harvard Economic Society



1930



March
“The worst effect of the crash on unemployment will be ended in sixty days.” —President Herbert Hoover



May
“We have now passed the worst and with continued unity of effort shall rapidly recover.” —President Herbert Hoover

“Business will be normal by fall.” —President Herbert Hoover



October
10/15: “Persons high in Republican circles are beginning to believe that there is some concerted effort on foot to utilize the stock market as a method of discrediting the Administration. Every time an Administration official gives out an optimistic statement about business conditions, the market immediately drops.” —Simeon D. Fess, Chairman of the Republican National Committee.



1932
7/8: New York Times Industrials close at 58.
No one any longer suggested that business was sound, fundamentally or otherwise.



1937
US unemployment temporarily drops below 8 million.



1938
One person in five is still out of work.



1941
The dollar volume of US production first returns to the level of 1929.



Observations, comments, and could it happen again?

There were many ways of making money in 1928. Never had there been a better time to get rich, and people knew it. 1928, indeed, was the last year in which Americans were buoyant, uninhibited, and utterly happy. It wasn’t that 1928 was too good to last; it was only that it didn’t last.

Only in the case of the rarest individuals can speculation be a part-time activity. Money for most people is far too important.

Perhaps it was worth being poor for a long time to be so rich for just a little while.


I am not given to prediction; one’s foresight is forgotten, only one’s errors are well remembered. But there is here a basic and recurrent process. It comes with rising prices, whether of stocks, real estate, works of art or anything else. This increase attracts attention and buyers, which produces the further effect of even higher prices. Expectations are thus justified by the very action that sends prices up. The process continues; optimism with its market effect is the order of the day. Prices go up even more. Then, for reasons that will endlessly be debated, comes the end. The descent is always more sudden than the increase; a balloon that has been punctured does not deflate in an orderly way.


Always when markets are in trouble, the phrases are the same: “The economic situation is fundamentally sound” or simply “The fundamentals are good.” All who hear these words should know that something is wrong.

Preventive incantation required that as many important people as possible repeat as firmly as they could that it wouldn’t happen. This they did. They explained how the stock market was merely the froth and that the real substance of economic life rested in production, employment, and spending, all of which would remain unaffected. No one knew for sure that this was so. As an instrument of economic policy, incantation does not permit of minor doubts or scruples.

Perhaps never before or since have so many people taken the measure of economic prospects and found them so favorable as in the two days following the Black Thursday disaster. The optimism even included a note of self-congratulation. Colonel Ayres in Cleveland thought that no other country could have come through such a bad crash so well. Others pointed out that the prospects for business were good and that the stock market debacle would not make them any less favorable. No one knew, but it cannot be stressed too frequently, that for effective incantation knowledge is neither necessary nor assumed.


The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a recorded 12,894,650 shares sold on October 24; precisely the same number were bought.) The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.

If one has been a financial genius, faith in one’s genius does not dissolve at once… Men have been swindled by other men on many occasions. The autumn of 1929 was, perhaps, the first occasion when men succeeded on a large scale in swindling themselves.


One of the oldest puzzles of politics is how is to regulate the regulators. But an equally baffling problem, which has never received the attention it deserves, is how is to make wise those who are required to have wisdom.


Any serious shock to confidence can cause sales by those speculators who have always hoped to get out before the final collapse, but after all possible gains from rising prices have been reaped.


There seems little question that in 1929, modifying a famous cliché, the economy was fundamentally unsound… Five weaknesses seem to have had an especially intimate bearing on the ensuing disaster. They are:

1) The bad distribution of income. In 1929 the rich were indubitably rich… It seems certain that the 5 per cent of the population with the highest incomes in that year received approximately one third of all personal income… This highly unequal income distribution meant that the economy was dependent on a high level of investment or a high level of luxury consumer spending or both…

2) The bad corporate structure… American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors, and frauds…

3) The bad banking structure… When one bank failed, the assets of others were frozen while depositors elsewhere had a pregnant warning to go and ask for their money. Thus one failure led to other failures, and these spread with a domino effect… It would be hard to imagine a better arrangement for magnifying the effects of fear…

4) The dubious state of the foreign balance…

5) The poor state of economic intelligence… It seems certain that the economists and those who offered economic counsel in the late twenties and early thirties were almost uniquely perverse. In the months and years following the stock market crash, the burden of reputable economic advice was invariably on the side of measures that would make things worse.

The sound and responsible adviser urged that the budget be balanced… The balanced budget was not a subject of thought. Nor was it, as often asserted, precisely a matter of faith. Rather it was a formula… Mass unemployment in particular had altered the rules. Events had played a very bad trick on people, but almost no one tried to think out the problem anew… The rejection of both fiscal (tax and expenditure) and monetary policy amounted precisely to a rejection of all affirmative government economic policy. The economic advisors of the day had both the unanimity and the authority to force the leaders of both parties to disavow all the available steps to check deflation and depression. In its own way, this was a marked achievement—a triumph of dogma over thought. The consequences were profound.


In some respects, the chance for a recurrence of a speculative orgy remains good No one can doubt that the American people remain susceptible to the speculative mood—to the conviction that enterprise can be attended by unlimited rewards in which they, individually, were meant to share.

The market will not go on a speculative rampage without some rationalization. But during any future boom some newly rediscovered virtuosity of the free enterprise system will be cited. It will be pointed out that people are justified in paying the present prices—indeed, almost any price—to have an equity position in the system. Among the first to accept these rationalizations will be some of those responsible for invoking the controls. They will say firmly that controls are not needed. The newspapers, some of them, will agree and speak harshly of those who think action might be in order. They will be called men of little faith.


Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.

-----

If you've stayed with me this far, you should know that all the data, quotations, and opinions above were extracted from John Kenneth Galbraith's The Great Crash 1929 (published in 1955), and rearranged by me to stress the chronology. I highly recommend that you read this book, in its entirety (it's only 194 pages), before next weekend.

[The reason for the erratic presentation of the New York Times Industrial index data is that the book frustratingly sometimes gives the closing value, and at others just the day's rise or fall.]

Jim Horning

Who's shooting whose foot?

[I should note at the outset that I am still a fan of both Java and Adobe products.]

For reasons that need not concern us here, my desktop machine was current on Microsoft updates, but had fallen behind on Java, Adobe Reader, and Flash. I have spent the better part of a working day getting current versions of these programs installed.

My initial tries to update Java, Reader, and Flash all failed, in ways that made me suspect that there might be some interdependencies. Unfortunately, I did not log everything that happened, but it ran somewhat like this:

• Suspecting that the problems I encountered at the Adobe website might be due to some use it made of Java, I decided to tackle Java first. But downloads from the Java.com site silently hung, reaching a point where they claimed to be copying files, but large fractions of an hour would go by with no disk activity (or non-trivial CPU activity). Since the installer window had no Cancel button, I had to terminate the installation task using the Task Manager.
• Trying again led to an error popup saying that an installation was already in progress. I eventually got around this by some combination of Add or Remove Programs and several reboots. The new result was a popup error box saying that a particular URL was not available; multiple retries led instantly back to the same error. At least there was an error number in the popup; I Googled it to find the advice to download the entire Java install file and do an offline install. This actually worked.
• However, the problem with acquiring the Adobe programs persisted. Eventually I noticed that, whenever I browsed to a site in the adobe.com domain, CPU usage shot up to half-busy and stayed there indefinitely. Almost exactly 50% (i.e., one full processor on a dual-processor machine) was being consumed by Internet Explorer. Responses to any clicks within the IE window took large enough fractions of an hour that I stopped waiting for them. This included responding to clicking on the red X to close the window, so again I resorted to Task Manager to kill the IE task. (I don't see how to report this problem to Adobe without effective access to the Adobe site.)
• It took me embarassingly long to realize that I did not have to go to the Adobe site to download freely available Adobe software such as Reader and Flash. By Googling for them with the added term "mirror", I was able to find (different) sources for each of these programs that would download them without opening any Adobe pages, although one of the file downloads indicated that the file was coming directly from Adobe. The downloaded programs were properly signed by Adobe.
• So now I am "in business" with current versions of Windows, IE7, Java 6.7, Reader 9, and Flash. But when I go to the Adobe website, I'm still hit with the 50% CPU Syndrome. (Fortunately, in the ordinary course of business, I don't have to go there very often.)

Presumably the reason that Java, Reader, and Flash are distributed free is that they want people to use them. You'd think they'd make it at least as convenient to download them as software that is for sale, wouldn't you?

And presumably the reason that Adobe has a website is that they want people to visit it, not avoid it like the plague because it will gobble their CPU cycles and incapacitate their browswers?

Of course, it's entirely possible that I've broken one of the 60,000 settings in my Windows Registry in some subtle way, but who or what can tell me which one, and how to fix it? I think I'm malware-free, thanks to the combined efforts of Norton, Spybot S&D, the corporate firewalls and filters, and my own caution about clicking on links in emails, but who knows? Maybe I've shot myself in the foot.

But in some sense, it scarcely matters what the root fault was: I'm just as upset with all the companies involved (for not making it possible to find and fix the problem) as I am when the airlines send my baggage to another continent without showing much enthusiasm for finding it.

Alienating your customers is almost never a sound business strategy.

PS Websites in other domains still seem to work normally. Without exhaustive testing, there's no way to tell if Adobe.com is the only domain exhibiting this behavior.

The power grid? Why would hackers want to mess with that?

Interesting story by Andy Greenberg at Forbes.com on a few folks who are uncomfortable that the US power grid is hackable, and that neither DHS nor the power industry seem to be working very hard to improve its security.

Last June, the Department of Homeland Security leaked a video documenting a disturbing experiment. Using only digital means, researchers hacked into a power plant's generator and caused it to cough and shake before shutting down in a cloud of black smoke.

That clip, demonstrating what has since become known as the Aurora vulnerability, served as a wake-up call for regulators, highlighting the need to guard against cyber-security threats to critical infrastructure like power plants and the telecom system. But at a hearing Wednesday, members of the House Committee on Homeland Security warned that those regulatory bodies aren't moving fast enough.

"I think we could search far and wide and not find a more disorganized response to a national security issue of this import," said Rep. James Langevin (D-R.I.), chairman of the Subcommittee on Emerging Threats, Cybersecurity and Science and Technology...

The subcommittee hearing also highlighted a new example: a report by the Government Accounting Office released Wednesday reveals a litany of cyber-security vulnerabilities in the systems of Tennessee Valley Authority, the nation's largest public power company. The GAO report said that that TVA had failed to implement simple security measures like updated firewall and anti-virus software. Many access points to the company's network lacked password protection, and some insecure systems connected to TVA's systems for controlling power generation, GAO director of information security Greg Wilshusen told the subcommittee.

Meanwhile, the states are chafing under pressure from the federal government to do more to protect their roads from improvised explosive devices (IEDs)...

Updated to add: Meanwhile, in Russia...

Could clicking a link—just clicking it—be a federal-level offense?

Scary opinion piece by Mark Gibbs in ComputerWorld.

Just imagine if one day in the near future the FBI comes to your enterprise with warrants that allow them to seize and remove any computer-related equipment, utility bills, telephone bills, any addressed correspondence sent through the U.S. mail, video gear, camera equipment, checkbooks, bank statements and credit card statements. The first question you'd ask is, "Who has done what?"

You're going to be presume your CEO has been involved in some outrageous stock manipulation, or maybe your CFO has been cooking the books. But no, the agent in charge says: "Someone here clicked on a Web link, and we're going to find out who did it."

A link?! Clicking on a link can now be a federal offense?! Was it a link to the truth about JFK's assassination (which we all know the CIA was responsible for ... or was it the Moonies?). Was the link going to launch an ICBM at the Kremlin? Nope, it was a link to a nonexistent cache of kiddie porn that was created specifically by the FBI to attract pedophiles.

As is often said at moments like these, I am not making this up; this is exactly what happened to a doctoral student at Temple University who was also a history professor at La Salle University named Roderick Vosburgh...

According to federal law, attempts to download child porn, whether successful or not, can result in prison sentences of up to 10 years, and a court found Vosburgh guilty of just that, "attempting" to follow a link, a link set up specially by the FBI to trap pedophiles...

The fact that the action might not have been done by you personally is, apparently, not an issue...

The second issue concerns browser add-ons that attempt to pre-cache the content of links on a page. These add-ons are to improve perceived performance, but imagine that you run a Web search and wind up on a page that links to one of these FBI honeypots: Your browser will access the link and, unless you are masking what you do through something like the Tor network, the Feds will get your IP address. Before you know what's going on, there will be a knock on your door, you'll be hurled to the ground, cuffed, Mirandized, and all of your computer gear, financial records and leftover Chinese food will be en route to the local FBI office.

But what if an employee's browser pre-caches the contents of one of these FBI links, or the employee actually clicks on it? Can you imagine the chaos and insanity that would result from the FBI paying your company a visit? Work would grind to a halt, PCs and other gear would be impounded, records taken and your business would be dead in the water.

They don't add up!

Ed Felten has a new post on the discrepancies observed in vote totals from some of New Jersey's electronic voting machines in the 2008 presidental primary. See also this post.

Every time Ed (with the assistance of troubled voting officials) documents a new inconsistency in the machine reports, the vendor (Sequoia) and the New Jersey Secretary of State come up with a new explanation of how a harmless error could have crept in. Then he comes up with another clear error, and the explanation has to be made more elaborate to cover it, too.

It's not obvious how long this charade will have to continue until someone in authority insists on an independent investigation. Of course, it's "just votes," it's not like money was involved...

My past posts on evoting.

Phorm is even more pernicious than I had thought

Harlan Yu has a good post on Freedom to Tinker, explaining why Phorm is worse than I had realized.

New technical details about its Webwise system have since emerged, and it’s not just privacy that now seems to be at risk. The report exposes a system that actively degrades user experience and alters the interaction with content providers. Even more importantly, the Webwise system is a clear violation of the sacred end-to-end principle that guides the core architectural design of the Internet.

This is a deal-breaker. If Comcast starts providing this "service," I will be moving to a new ISP (and a new video provider).

HSBC's turn to lose customer data

Michael Krigsman has a very good post on ZDnet about how the UK's largest bank sent unencrypted data on 370,000 customers through the mail, and lost it. It's amazing who shows up prominently on the list of those who don't have a clue about data security... They should have read this.

2010 Census turns victim of another government IT fiasco

Ho, hum! The US wastes another $3Billion in a failed automation project.

Reports in The New York Times, ZDnet, Digital Trends.

My previous post.

Loss of personal data on still on the rise

An article by Mark Boslet in the San Jose Mercury News reports that 2007 was 40% worse than 2006, in terms of number of reported personal data breaches in the US; however the number of records compromised grew sixfold, to 128 million.

There's a good chance that at least one of those compromised records was yours.

"We think people are going to learn from their mistakes, but they aren't," said Mary Monahan, senior analyst at Javelin Strategy & Research, a Pleasanton research firm.

This is a clear example of market failure; more government intervention will apparently be needed to counter widespread organizational complacency. We would hardly know anything about it at all if California had not enacted its notification law.

But that was before we went public.

"Don't be evil."

Then.

U.S. unprepared for ongoing cyberwar

This story by Bob Brewin in GovExec.com says that we're already engaged in cyberwar, but aren't anywhere close to prepared.

"Cyberwarfare is already here.... It's one of our major challenges," said Defense Deputy Secretary Gordon England on Monday at the annual National Community Service and Legislative Conference of the Veterans of Foreign Wars.

"I think cyberattacks are probably analogous to the first time, way back when people had bows and arrows and spears," he said. "And somebody showed up with gunpowder and everybody said, 'Wow. What was that?'"

England made his comments the same day that the Pentagon released a report saying that the 2007 cyberattacks against its networks and those operated by other governments around the world "appear" to come from China.

During a Senate Armed Services Committee hearing last week, Sen. John Thune, D-S.D., asked National Intelligence Director Michael McConnell if the United States was prepared to deal with threats against military and civil networks and information systems. "We're not prepared to deal with it," said McConnell, identifying both China and Russia as adversaries who are attempting to penetrate U.S. information systems.

Army Lt. Gen. Michael Maples, director of the Defense Intelligence Agency, agreed with McConnell and told the panel that a key threat facing this country is the "sophisticated ability of select nations and nonstate groups to exploit and perhaps target for attack our computer networks."

Sorry, lost your tax return

This story speaks for itself.

Census Bureau's $2 Billion overrun

This post on a ZDnet blog says that the US Census Bureau faces cost overruns up to $2 billion on an IT initiative replacing paper-based data collection methods with specialized handheld devices for the upcoming 2010 census. The Bureau has not implemented longstanding Government Accountability Office (GAO) recommendations and may therefore be forced to scrap the program. Harris Corp., the contractor associated with this incompetently managed initiative, was awarded a $600 million contract to develop the handhelds and related software.

Managing an $11 billion initiative is a daunting task and unforeseen problems are inevitable. Nonetheless, the GAO, going back to January, 2005, repeatedly identified significant procurement, management, and operational risks associated with this project. For reasons unknown, the Census Bureau chose not to follow these recommendations.

An accurate census in 2010 is of enormous importance, affecting (among other things) the allocation of Congressional seats and funds in many federal programs for the next decade.

Quite a lot more relevant information here.

Supermarket chain exposed 4 million card numbers.

According to this story in the New York Times, the Hannaford Brothers supermarket chain has reported a security breach that potentially exposed 4.2. million credit and debit card numbers. However, only 1,800 cases of resulting fraud have been identified so far.

Stay tuned.

This is a problem that won't go away until all companies processing financial information are put on the hook for all resulting losses, and are made to realize that they are on the hook. (Sarbanes-Oxley for the shopping and working public.) As with so many other things, public outrage is losing its force from sheer repetition of the offence.

UK ISPs to sell users' private browsing information

This shocking post by Mike Scott in RISKS DIGEST deserves the widest possible publicity--and condemnation of the plan.

Three major UK ISPs apparently are in advanced talks with a company called Phorm, intending to let Phorm monitor all unsecured web traffic to and from their users. The expressed intent is to offer an "improved browsing experience" through better targeted web advertising, and anti-phishing protection - thereby "improving" one's internet security. One, BT, has already trialed the system...

Phorm claim the data is summarized and anonymized; regular readers of RISKS will I'm sure be aware that true anonymization is exceedingly difficult--and in fact this scheme would give ready access to identities should anyone take the trouble. Quite apart from being a breach of trust by the ISPs involved, it appears to drive a coach, horses and a whole army through protection offered by assorted UK legislation, including the Data Protection Act, Computer Misuse Act, Regulation of Regulatory Powers Act, etc, etc. It will if nothing else provide a central point for cracking to obtain information about these ISPs' users.

Edited on 4/9/08 to add: Phorm is also seeking deals with US ISPs. For more technical detail on what Phorm is doing and why it is pernicious, see "Phorm's All-seeing Parasite Cookie."