NYCSOUTHPAW

"In the end it all comes down to talent." -Sandy Koufax

MH370: The Snows of Yesteryear

We are reasonably sure that an airplane left Malaysia about a week ago bound for Beijing, and everyone has been wrong about it ever since. It was by all accounts a good airplane—a Boeing 777 outfitted with a pair of Rolls Royce Trent 800 engines—modern, safe, well-built and skillfully maintained but, as it turned out, easily misunderstood.
 
The airplane had entered into its flying life in mid-May of 2002 and had been delivered to Malaysia Airlines later that month. It remained in Malaysia Airlines’ care and in its service from that time until some time about a week ago, completing on its way 7,525 cycles in service. In the lingo of the aviation industry, a cycle is one take-off and one landing. 
 
The airplane was carefully monitored during these first 7,525 cycles, but not much out of the ordinary happened. In Shanghai in August of 2012, it had lost a wingtip in a scrape with another jet on the taxiway. So far as we know, the airplane’s maintenance history gave no hint of the mysteries that would accompany its later career.
 
The second phase of the airplane’s life began at some point after it had embarked on its 7,526th cycle about a week ago. It had, to be more precise, departed from Kuala Lumpur at 12:41 a.m. local time on March 8th with 239 souls aboard, and—as expected—flown northeast across the Malay peninsula and out over the Gulf of Thailand. At 1:22 a.m. the air traffic controllers at Subang recorded their last contact with the pilots and the airplane’s transponder, which showed that the airplane was traveling at 542mph, 35,000 feet over the water.  There was no intimation that anything was wrong.
 
What happened after that is anybody’s guess, and boy have they been guessing. After six full days of investigation, we can confidently say that the airplane either continued northeast or turned off in some other direction, that it exploded or broke up or suffered damage or remained wholly intact, that it kept flying or plunged into the sea. (Certain corners of the internet will hasten to add that the airplane may have been plucked up into the heavens by—perhaps—alien life-forms. Experience suggests that this is an unprofitable avenue of investigation, but at this point we lack the evidence to rule it out.)  
 
Enormous flotillas of ships and fleets of airplanes searched the shallow Gulf of Thailand and the South China Sea, turning up nothing but false leads. A promising oil slick was determined not to contain jet fuel. Floating items thought to be debris turned out to be more prosaic garbage. Chinese satellite photos of enormous floating shapes appeared on the web along with coordinates, the coordinates were checked, and the photos were quickly disavowed and disciplinary action promised.
 
As the Gulf of Thailand persisted in its refusal to yield up any dead, frustrated minds began to turn to the broader possibilities of the case. 
 
With the fuel it had taken on in Kuala Lumpur, the airplane could have gone far under its own power—a massive circle centered on its point of last contact embracing its intended Beijing, the heights of the Himalayas, Mumbai, Diego Garcia, the northwest coast of Australia, and all the seas, islands, mountains, plains, and jungles in between. (The circle also contains a healthy fraction, perhaps more than half, of the entire population of the Earth.) 
 
Moreover, there were fairly credible reports that the airplane had kept flying. It had been glimpsed by radar, a Malaysian Air Force General may have said (though he now denies it), heading west again across the Malay peninsula and out over the Strait of Malacca toward the Indian Ocean. The Wall Street Journal reported that U.S. government officials believed the trusty Rolls Royce engines—whispering to the ground through communications systems of their own—had kept sending telemetry reports for four hours after the last transponder contact. This report was quickly disputed by several sources, although everyone allowed (warily) that they couldn’t rule out a period of continued flight. The search ships and planes—no more certain than the officials and the newspapers—wearily expanded their grids into the Strait of Malacca and the vast Indian Ocean.
 
All alike—officials, traumatized families, sailors, airmen, newspapermen, and observers—sought the answer to an urgent question: What terrible crisis had led the plane to vanish, whether far off course or down into the deep? 
 
Neither the weather, nor the profiles of the pilots, nor the plane’s mechanical history supplied a likely answer. The passenger manifest offered two (or was it four? no, it was two.) miscreant youths who had flown using stolen passports under the patronage of a shadowy Iranian named Mr. Ali, but upon investigation the two men seemed more likely to be migrants than terrorists.  
 
As the leads petered out, the theories grew wilder. Anonymous officials stoked speculation in the papers. Editors, for want of something with more substance, gave their pages over to this speculation and even more fantastical hypotheses. And the plane stayed gone.

A Few Takeaways from Snowden’s Takeaway

  • Top Secret information is not nearly as secure, or compartmented, as we thought. As Farhad Manjoo has written, Edward Snowden was a relatively young and inexperienced cog in the sprawling world of national security. Yet he was able to load a breathtaking amount of extraordinarily sensitive information onto a laptop, fly to China with that laptop, and hand off his secrets to—at least—two separate teams of journalists, all without raising enough of a red flag to prevent the breach. It’s perhaps understandable that Snowden would have access to the PRISM presentation if, as it seems, that was the program he was helping with. (Though, as Manjoo points out, it seems a fool thing to prepare such a presentation at all.) But why on earth did Snowden have the means to see a copy of a Top Secret order the FISA court recently issued to Verizon? Or a map tool for cataloguing all the places on the globe where the NSA’s data was being collected? Or President Obama’s target list for potential cyber-attacks? Did Snowden need to know any of that information to do his job? It’s hard to see why he would have. If a tech-savvy 29 year old at a government contractor—seemingly acting on his own—was able to amass and steal such a diverse portfolio of secrets, what might a fully-featured foreign intelligence service be able to do?
  • Booz Allen is in a world of hurt. According to the contractor’s own statement, Edward Snowden has been working as a contractor at Booz Allen for less than three months.  According to Barton Gellman, the Washington Post reporter who first started chasing the story, Snowden has been in direct contact with WaPo about making this disclosure since May 16 and indirectly before that.  In other words, for at least 30%—and perhaps as much as 50%—of Snowden’s extremely brief tenure at Booz, he’s been getting ready to betray the company and its principal client. Assuming that Snowden obtained his data using the access he had at Booz Allen, that suggests the contractor had extremely shoddy controls over its Top Secret data and its employees—even those employees who were brand new additions to the enterprise.
  • Apple, Facebook, Google, Microsoft, Yahoo, et al. took an unwise risk in participating in PRISM. Whether they knew it or not, the tech giants took a huge risk when they chose to give the US intelligence community privileged access to their foreign customers’ private data (exactly what sort of privileged access it was remains a bit fuzzy, but it’s clear that providing it was a choice some companies made and others, e.g. Twitter, did not). It does not appear, from what we know so far, that the tech giants were adequately compensated for that risk. The tech giants are now facing real, growing outrage in European markets that may easily mature into material damage to their respective businesses.  Who do they turn to remedy that damage? The most obvious target of their ire would be Booz Allen, whose incompetence seems to be at the heart of this mess, but it’s doubtful—with the US government standing between them—that the injured tech giants will have any contractual claims against the defense contractor.

On Permanent Secrets

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(image via)

The Wire creator David Simon wrote an interesting piece defending the NSA’s indiscriminate collection of Verizon’s (and surely other telecom’s) call records.  Simon analogizes the practice to a Baltimore Police Department investigation that any Wire fan will find instantly familiar:

Allow for a comparable example, dating to the early 1980s in a place called Baltimore, Maryland. There, city detectives once began to suspect that major traffickers were using a combination of public pay phones and digital pagers to communicate their business. And they took their suspicions to a judge and obtained court orders — not to monitor any particular suspect, but to instead cull the dialed numbers from the thousands and thousands of calls made to and from certain city pay phones.
Think about it. There is certainly a public expectation of privacy when you pick up a pay phone on the streets of Baltimore, is there not? And certainly, the detectives knew that many, many Baltimoreans were using those pay phones for legitimate telephonic communication. Yet, a city judge had no problem allowing them to place dialed-number recorders on as many pay phones as they felt the need to monitor, knowing that every single number dialed to or from those phones would be captured. So authorized, detectives gleaned the numbers of digital pagers and they began monitoring the incoming digitized numbers on those pagers — even though they had yet to learn to whom those pagers belonged. The judges were okay with that, too, and signed another order allowing the suspect pagers to be “cloned” by detectives, even though in some cases the suspect in possession of the pager was not yet positively identified.
All of that — even in the less fevered, pre-Patriot Act days of yore — was entirely legal. Why?
Because they aren’t listening to the calls.

This is undoubtedly a fair point. American law enforcement is not shy about seeking call logs—as distinct from wiretaps—and courts are generally receptive to their requests.

What Simon doesn’t seem to take on board is that we’re not talking about American law enforcement.  The National Security Agency is, obviously, an intelligence agency rather than a police department, and the difference has real implications for Simon’s argument.  

The goal of the Baltimore detectives who gathered those pay phone records, after all, was to make a case against the real-life equivalent of the Barksdale gang that prosecutors could use to win convictions in court.  In order to do that, they had to develop an investigative procedure that would survive the scrutiny of the defendants, defense attorneys, judges, juries, newspaper reporters and the public at large.  In other words, even though the investigation was conducted in secret, the Baltimore detectives knew that their efforts, and the sources and methods they employed, ultimately had to be sound enough to prove something in public. That hardly compares to what the NSA does.

The NSA produces an intelligence product for a very select group of consumers, principally the president and his national security team, who are not in a position to check the NSA’s work. Like the Baltimore detectives, the NSA’s investigations are conducted in secret.  But its warrant applications to the FISA court stay secret forever, and its analysis and findings are delivered in secret too.  It is profoundly unlikely that the NSA’s Top Secret work product will ever find its way into an indictment, or an evidence hearing, or a trial for the very reason that the public processes of criminal justice might well expose the NSA’s closely held secrets.

In fact, the only two ways that someone at the NSA is likely to face the music for doing something improper—or simply for being bamboozled or getting it wrong—are (i) unauthorized classified leaks of the sort we’ve seen this week (which the NSA has never truly suffered before) or (ii) executive action, taken on the basis of NSA intelligence, that goes pear-shaped. Aside from that, the NSA’s secrets are permanent.

Perhaps it shouldn’t be that way.  Perhaps the discipline of making a case in public, and knowing that what you have done inevitably will be subject to scrutiny when the case is made, is useful.  It’s certainly true, as the NSA has argued, that its subjects will change their behavior if they know how the NSA operates.  But it’s also probably true that the NSA would benefit from having to change the way it operates and find new ways to do its job. Police departments have always wrestled with the problem of being observed, including by such careful observers as David Simon, and generally been the better for it.

The Debt Ceiling Must Be Destroyed

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The entrance to the Senate Appropriations Committee room in the US Capitol, surmounted by Bellona the Roman goddess of war. (It used to be the Military Affairs Committee room.) 

Under our consititutional system and current law:

  1. Congress appropriates money to be spent on its programs by passing laws, and the Treasury is required to spend it. 
  2. Congress lays taxes by passing laws and the Treasury collects their revenue.
  3. To the extent that the amount required to be spent exceeds the revenue that comes in, the Treasury typically sells bonds (i.e. borrows money) to cover the difference.
  4. Congress also sets an absolute maximum on the amount the Treasury is permitted to borrow (the Debt Ceiling).

Assume for a moment that the only ways the Treasury can raise money are either collecting taxes or borrowing. In that case, items 1-3 above are a closed system. That is, Congress determines the amount that Treasury will borrow by setting mandatory spending and tax levels. In such a closed system, the Debt Ceiling law is either superfluous or inconsistent.

As the national debt has grown, the Debt Ceiling has begun making the ominous transition from superfluous to inconsistent, and free-for-all of a public debate has arisen over how to resolve the problem. What follows is an attempt at a taxonomy of those solutions.

  1. Increase tax revenue or decrease spending on programs. Congress has undertaken both tax increases and spending cuts, but all agree that the measures Congress has taken will not be sufficient to resolve the problem. There does not appear to be political will to do more (moreover, either or both courses of action may be economically inadvisable).
  2. Break one of the laws — either: (a) fail to make some required payments or (b) borrow money in violation of the debt ceiling. The only legal justification for option (a) other than the impossibility of following both the spending and tax laws and the Debt Ceiling law. Option (b) could be justified on the same “impossibility” grounds; defenders of option (b) could also rely upon an interpretation of the public debt clause of the 14th amendment, which was intended to prevent Congress from reneging on duly authorized civil war debt.  That theory is generally regarded to be shaky and the White House has ruled out using it (I think it has some merit).  Any failure to make payments, per option (a), would lead to bad economic consequences, but there is a spectrum of seriousness depending on what payments the government fails to make: bond payments (apocalyptic), entitlement payments (really really bad), federal contractors and employees (really bad)). Option (b) would more or less maintain the economic status quo.
  3. Open up the closed system via seigniorage. This is the idea behind the trillion dollar coin.  The Treasury Secretary would use an arcane statute to mint currency that would be used to satisfy the Treasury’s spending obligations without further borrowing.Platinum coin seigniorage is the only solution that appears to comply with current law in all respects (without changing any laws).  Seigniorage is also, I think, the idea behind the Treasury IOU solution that some have proposed—though that solution sits on much shakier legal ground.
  4. Abolish the Debt Ceiling. This is the best solution of all.
UPDATE: It appears the Treasury and the Fed ruled out the platinum coin option today. 

The New York Times has a Very Serious Proposal for a Shadow Currency

USC tax law professor Edward Kleinbard thinks that minting the platinum coin is “fantastical,” and he has a Very Serious alternative proposal:

There is a plausible course of action, one that the president should publicly adopt in the coming weeks as his contingency plan should debt-ceiling negotiations falter. He should threaten to issue scrip — “registered warrants” — to existing claims holders (other than those who own actual government debt) in lieu of money. Recipients of these I.O.U.’s could include federal employees, defense contractors, Medicare service providers, Social Security recipients and others.

The scrip would not violate the debt ceiling because it wouldn’t constitute a new borrowing of money backed by the credit of the United States. It would merely be a formal acknowledgment of a pre-existing monetary claim against the United States that the Treasury was not currently able to pay. The president could therefore establish a scrip program by executive order without piling a constitutional crisis on top of a fiscal one.

To avoid any confusion with actual Treasury debt, and to be consistent with the law governing claims against the United States more generally, the scrip would not pay interest in most cases. And unlike debt, it would have no fixed maturity date but rather would become redeemable in cash only when the secretary of the Treasury was able to certify that there’s enough money available in the Treasury’s general fund to cover it.

Finally, the scrip would be transferable, allowing financial institutions to buy it at a high percentage of its face value, knowing that the political crisis would almost certainly be resolved before long.

Short version: Let’s postpone paying back our debts with a no maturity, zero coupon, federal IOU that President Obama creates by executive order.
A couple thoughts on this: 
  • Kleinbard’s IOUs are probably a whole new fiat currency. They would be perpetual obligations of the government that are freely transferable and earn no interest—just like the bills in your wallet.  
  • Coining money is one of Congress’ constitutionally enumerated powers, so the executive branch would face pretty heavy judicial scrutiny if it just popped off and exercised that power for its own purposes. Encroaching on Congress’s powers without statutory authority is much shakier legal ground than simply using explicit statutory authority. (Harry Truman learned this the hard way.) 
  • (By the way, I can’t understand why Kleinbard says, later in his piece, that his scrip program “would not explicitly challenge any constitutional allocation of powers.” Of course it would! Even if you don’t believe anything I wrote above, getting around Congress’s debt ceiling by executive legerdemain is the whole game here.)
  • Kleinbard’s idea is to evade the debt ceiling by executive order—with no pretense of Congressional authorization. Proponents of the platinum coin, by contrast, are suggesting the executive use his clear authority under an existing (arcane!) statutory grant to circumvent the debt ceiling. An enormously valuable coin may seem a little silly, but there’s no question that using statutory authority is going to be a much more defensible position in court. 
In any case, Kleinbard is proposing that we attempt to pay back dollar denominated obligations with something other than dollars on the table.  That something is going to be either:
  • a brand new—awfully sketchy—currency, or 
  • an IOU that says, in effect:
Dear U.S. Creditor-
There’s no money for you today. Perhaps there will be later. I’ll call you.
-Uncle Sam

PS No more interest for you! 
PPS You might now be subordinated to my other creditors. 
Kleinbard needs to explain to us why either one of those scenarios doesn’t amount to a flat-out default.

Frederick Douglass: Decoration Day Speech



The Unknown Loyal Dead

Arlington National Cemetery, Virginia, on Decoration Day, May 30, 1871

Friends and Fellow Citizens:

Tarry here for a moment. My words shall be few and simple. The solemn rites of this hour and place call for no lengthened speech. There is, in the very air of this resting-ground of the unknown dead a silent, subtle and all-pervading eloquence, far more touching, impressive, and thrilling than living lips have ever uttered. Into the measureless depths of every loyal soul it is now whispering lessons of all that is precious, priceless, holiest, and most enduring in human existence.

Dark and sad will be the hour to this nation when it forgets to pay grateful homage to its greatest benefactors. The offering we bring to-day is due alike to the patriot soldiers dead and their noble comrades who still live; for, whether living or dead, whether in time or eternity, the loyal soldiers who imperiled all for country and freedom are one and inseparable. 

Those unknown heroes whose whitened bones have been piously gathered here, and whose green graves we now strew with sweet and beautiful flowers, choice emblems alike of pure hearts and brave spirits, reached, in their glorious career that last highest point of nobleness beyond which human power cannot go. They died for their country.

No loftier tribute can be paid to the most illustrious of all the benefactors of mankind than we pay to these unrecognized soldiers when we write above their graves this shining epitaph.

When the dark and vengeful spirit of slavery, always ambitious, preferring to rule in hell than to serve in heaven, fired the Southern heart and stirred all the malign elements of discord, when our great Republic, the hope of freedom and self-government throughout the world, had reached the point of supreme peril, when the Union of these states was torn and rent asunder at the center, and the armies of a gigantic rebellion came forth with broad blades and bloody hands to destroy the very foundations of American society, the unknown braves who flung themselves into the yawning chasm, where cannon roared and bullets whistled, fought and fell. They died for their country.

We are sometimes asked, in the name of patriotism, to forget the merits of this fearful struggle, and to remember with equal admiration those who struck at the nation’s life and those who struck to save it, those who fought for slavery and those who fought for liberty and justice. 

I am no minister of malice. I would not strike the fallen. I would not repel the repentant; but may my “right hand forget her cunning and my tongue cleave to the roof of my mouth,” if I forget the difference between the parties to that terrible, protracted, and bloody conflict. 

If we ought to forget a war which has filled our land with widows and orphans; which has made stumps of men of the very flower of our youth; which has sent them on the journey of life armless, legless, maimed and mutilated; which has piled up a debt heavier than a mountain of gold, swept uncounted thousands of men into bloody graves and planted agony at a million hearthstones — I say, if this war is to be forgotten, I ask, in the name of all things sacred, what shall men remember?

The essence and significance of our devotions here to-day are not to be found in the fact that the men whose remains fill these graves were brave in battle. If we met simply to show our sense of bravery, we should find enough on both sides to kindle admiration. In the raging storm of fire and blood, in the fierce torrent of shot and shell, of sword and bayonet, whether on foot or on horse, unflinching courage marked the rebel not less than the loyal soldier.

But we are not here to applaud manly courage, save as it has been displayed in a noble cause. We must never forget that victory to the rebellion meant death to the republic. We must never forget that the loyal soldiers who rest beneath this sod flung themselves between the nation and the nation’s destroyers. If today we have a country not boiling in an agony of blood, like France, if now we have a united country, no longer cursed by the hell-black system of human bondage, if the American name is no longer a by-word and a hissing to a mocking earth, if the star-spangled banner floats only over free American citizens in every quarter of the land, and our country has before it a long and glorious career of justice, liberty, and civilization, we are indebted to the unselfish devotion of the noble army who rest in these honored graves all around us.

sunsetgun:

Stanley Kubrick & Sue Lyon on set of Lolita.

sunsetgun:

Stanley Kubrick & Sue Lyon on set of Lolita.