When the first message on the ARPANET (the predecessor of today’s Internet) was sent by UCLA programmer Charley Kline, on October 29, 1969, the message text was the word “login”; the letters “l” and the “o” were transmitted, then the system crashed.

Forty two years later, the Internet is everywhere and rapidly becoming embedded in every device. Kevin Kelly sees the Net as evolving into a single “planetary computer” with “all the many gadgets we possess” as “windows into its core.” The Internet Society’s slogan is “The Internet is for everyone,” but Vint Cerf (who co-developed the TCP/IP network protocol that connects everything on the Net today) now prefers “The Internet is for everything.”

The world-wide adoption of a decentralized network that connects everything creates continuous technical, social and policy challenges that no one could have foreseen in 1969. Even as we take the Net for granted, the way we do the air that we breathe, decisions are being made by policy-makers, technologists and end-users that shape its future.

The success of the Internet has had a great deal to do with the development of open standards — often by volunteers — in groups such as the Internet Engineering Task Force (IETF). Decisions in Working Groups (WG) of the IETF are reached by consensus on the group mailing list so that anyone active on that list can be part of the process.

The need to add capacity is a constant challenge. What balance of public and private funding, regulation or deregulation are appropriate, and which types of infrastructure (centralized vs. decentralized; fiber, cable, wireless) warrant investment are subject to ongoing debate.

The Net has provided a platform for incredible innovation and economic growth. How to reward innovation and creativity while encouraging the widest dissemination of new content and technologies? How to encourage disruptive technologies while mitigating their potentially negative impacts?

Does there have to be a conflict between freedom and privacy on one hand and security on the other? How can users safely share personal information using social media which rely on the sale of their personal data as a business model? What legal and technical protections are necessary for businesses to securely move into the cloud?

Internet users have continuously influenced key technology innovations and policy decisions. But keeping them in the decision-making loop as they increasingly take the Net for granted presents an ongoing challenge.

On June 14, Internet pioneers Vint Cerf, Sir Tim Berners-Lee, inventor of the World Wide Web, and Lawrence E. Strickling, Assistant Secretary for Communications and Information, and Administrator, National Telecommunications and Information Administration (NTIA), will address these questions as keynote speakers for the INET Conference in New York City, sponsored by the Internet Society and the Internet Society of New York. [Disclaimer: As President of the Internet Society of New York I will deliver opening remarks.]

There will also be panels featuring industry leaders, members of civil society organizations, open source software advocates and government officials. The conference is open to the public although advance registration is required. It will also be streamed live.

Just as a democracy is never the rule of the people, but rather the people who participate in the process, the Internet has evolved through the efforts of technologists and activists — many who have volunteered their time to develop open standards, open source software and to advocate for an open Internet. It’s your call: What kind of Internet do you want?

Albany, New York isn’t just the seat of a clown car state government — it’s also a college town. And college students, when boozed to the gills, can out-bozo politicians. (Well, almost.) On March 12th crowds of drunken students rioted in the Albany neighborhood known as the student ghetto. The lads and lassies, most of whom seemed to be from UAlbany (a major campus of the State University of New York aka SUNY), had prepped for the city’s St. Patrick’s Day parade with hours of bar crawls and Kegs and Eggs house parties. Eventually the breakfast bunch spewed out onto the frosty streets.

The Albany Student Press claims that the Albany police, in an effort to tamp down the annual festival of collegiate binge drinking, had rousted the house parties. Pushing participants outdoors where “frat boys and sorority chicks”* joined them in solidarity. The non-student press hasn’t mentioned any rousts. Whatever. Hundreds of students milled in the streets, wearing neon green tees and bellowing like cattle on jimsonweed. Smaller groups commenced to trash. Cars were pushed into the street and smashed. Appliances were hurled from balconies. Cans and bottles flew. Several cops were tackled. Most (though not all) in the crowd laughed to see such sport. Their cellphones captured the riot. YouTube took it viral. Suddenly, all eyes were on Albany’s student ghetto.

Click here to view the embedded video.

Albany pols and college officials freaked. Were they riled by the riot — or the nationwide publicity?

Callow binge drinkers have been stampeding in the student ghetto for years. And not just during the daze of St. Pat’s. A brief search of YouTube turns up numerous vids of students from UAlbany and the College of St. Rose (a private university adjacent to the student ghetto) making merry on many occasions. Heck — I lived on the edge of the student ghetto in 2000/2001 and can personally attest that every weekend, except for ones during breaks and vacations, was a holiday in the hood. Or should I say — a party in its mouth? The sidewalks were a mosaic of greasy pizza boxes, crushed beer cups, broken bottles, and vom. In winter the mosaic froze over, spring brought the big patty melt.

Walking through the student ghetto was an eyeball assault. Its once-beautiful two and three family homes were sinking into the sludge. Absentee landlords and young lugs living la vida transient don’t do upkeep. A virtual tour of the homes’ interiors can now be had on YouTube. Footage of semiconscious or completely zonked students being owned by their roomies is a staple on Student Ghetto, The Reality Show. If you look past the limp bodies in funny degrading poses, you can see the subdivided warrens, rats’ nest wiring, and broken windows covered with trash bags.

Code enforcement? What code enforcement?

I used to wonder if parents actually visited their kids’ digs. And what they thought if they did. After all, parents frequently pay for those digs. Some even send rent directly to the landlords. I also wondered if parents understood the intensity — and heavy underage aspect — of the student ghetto bar scene. It gave me quite a turn to see really young girls staggering out of bars blitzed blind and dumb. Particularly since the neighborhood is also a crime scene.

Muggings, assaults, and burglary shadow the student ghetto. Students are perceived as easy pickings; predators from other ghettos come to partake. In the autumn of 2008, a UAlbany senior was shot to death a few blocks from where I once lived. Drug trade? It’s like, historic. One street has an evil rep going back decades. From my window I watched deals going down on the corner of said street. The longevity of its rep made me cynical (wrongly, I’m sure) about notifying the Albany police. Instead I called the county cops and hoped for the best.

But back to Kegs and Eggs. Some 40 students were arrested. A few days after the riot YouTube footage was being used to identify more participants. Pictures taken from videos were released to the press. (Many of the alleged perps seemed in dire need of Clearasil.) Detective James Miller, official spokesman for the Albany Police Department, promised swift and certain justice.

On March 16th, a New York Daily News editorial blasted SUNY Albany for being known for “hard partying” rather than quality education. The editorial also denounced the “moms and dads” of the rioters, for contributing to a “culture you let sprout into criminal proceedings.” The next day, the first of the UAlbany students seen in the video pictures turned himself in. OMG! His father turned out to be Bob Sapio, senior executive editor of the New York Daily News. Was Dad’s face red!

Also red faced: Detective James Miller, official spokesman for the Albany Police Department. On March 18th Detective Miller (now on suspension) was arrested for allegedly driving drunk. In an official vehicle, while off duty. Miller apparently refused to take a breathalyser test. DWI cases can be more difficult to prosecute sans results from breath tests. In some cities, police officers aren’t allowed to refuse breathalysers. But Albany has its own way of doing things.

For instance, despite much local coverage of the Kegs and Eggs riot, plus related articles about housing conditions in the student ghetto, the neighborhood’s worst landlords have yet to be outed by the news media. And given the lack of code enforcement (a problem in more nabes than just the student ghetto) you’d expect some investigative reporting on who hearts who — politically speaking.

Another Albany oddity: the in-office longevity of Mayor Jerry Jennings. When Jennings ran for his first term in 1993 yes 1993 he waxed reformer about the student ghetto and vowed change. He renews those vows regularly. Particularly when public funding can be accessed via the vowing.

In April 2005, Mayor Jennings took an after dark walking tour of the student ghetto, accompanied by the late Kermit L. Hall, then president of SUNY at Albany. The town and gown twosome dialogued with students hanging in front of bars and tut-tutted over slum conditions. President Hall vowed to help rid the neighborhood of drugs, violence, and blight. Some $400,000 in government grants was set to flow through the New York State Division Of Criminal Justice into a “historic partnership”** between SUNY Albany and the John Jay College of Criminal Justice in NYC — as part of the crime fighting initiative Operation Impact. The Albany police were eventually outfitted with cool tech tools via Operation Impact. Department officials say crime in Albany is being fought more successfully thanks to those tools. Folks in and around the student ghetto aren’t convinced.

Operation Impact is one of many initiatives that over the years, have been accessed by Mayor Jerry Jennings and a string of area college officials in efforts to re-imagine the student ghetto. Yet somehow, the neighborhood remains a place where impressionable young oafs and oafettes pick up the perception that civilization is far far away.

But change may finally be in the wind. City officials are now making a concentrated effort to refer to the student ghetto as the Education District…

Carola Von Hoffmannstahl-Solomonoff
Mondo QT

*Assigning blame for Kegs N Eggs melee, Albany Student Press, 03/26/11

**Governor Pataki Announces Historic Partnership with UAlbany and John Jay College to Develop Enhanced Crime Fighting Initiatives Impact, Office of the Governor Press Release, 04/04/05

Last week we once again heard numerous voices calling for intervention in Libya. Most say the US should establish a “no-fly” zone over Libya, pretending that it is a benign, virtually cost-free action, and the least we could do to assist those trying to oust the Gaddaffi regime. Let us be clear about one thing: for the US to establish a “no fly” zone over all or part of Libya would constitute an act of war against Libya. Establishing any kind of military presence in the sovereign territory of Libya will require committing troops to engage in combat against the Libyan air force, as well as anti-aircraft systems. The administration has stated that nothing is off the table as they discuss US responses to the unrest. This sort of talk is alarming on so many levels. Does this mean a nuclear strike is on the table? Apparently so.

In this case, I would like to make sure we actually follow the black letter of the law provided in the Constitution that explicitly grants Congress the sole authority to declare war. This week I will introduce a concurrent resolution in the House to remind my colleagues and the administration that Congress alone, not the president, decides when to go to war. It is alarming how casually the administration talks about initiating acts of war, as though Article 1 Section 8 of the Constitution does not exist. Frankly, it is not up to the President whether or not we intervene in Libya, or set up “no-fly” zones, or send troops. At least, it is not if we follow the Constitution. Even by the loose standards of the War Powers Resolution, which cedes far too much power to the president, he would have no authority to engage in hostilities because we have not been attacked — not by Gaddafi, and not by the rebels. This is not our fight. If the administration wants to make it our fight, let them make their case before Congress and put it to a vote. I would strongly oppose such a measure, but that is the proper way to proceed.

Constitutional questions aside, Congress also needs to consider the interests of the American people. Again, we have not been attacked. Whatever we may think about the Gaddafi regime, we must recognize that the current turmoil in Libya represents an attempted coup d’etat in a foreign country. Neither the coup leaders nor the regime pose an imminent threat to the United States and therefore, as much as we abhor violence and loss of life, this is simply none of our business. How can we commit our men and women in uniform to a dangerous military operation in Libya when they swore an oath to protect and defend the Constitution? We must also understand that our intervention will undermine the legitimacy of whatever government prevails in Libya. Especially if it is a bad government, it will be seen as our puppet and further radicalize people in the region against us. These are terrible reasons to put our soldiers’ lives at risk.

Finally we need to consider the economic cost. We don’t have the money for more military interventions overseas. We don’t have the money for our current military interventions overseas. We have to rely on the Fed’s printing presses and our ability to borrow from China to fund these wars. That alone should put an end to any discussion about getting involved in Libya’s civil war.

Last week Secretary of State Hillary Clinton testified before the House Foreign Affairs Committee, and I had the opportunity to raise some of my concerns regarding US foreign policy and the costs of our interventionism around the world.

Many observers claim that the recent overthrow of governments in northern Africa and the Middle East will result in more liberty for individuals across those regions. I sincerely hope this proves to be true, but history is replete with revolutions that began as a cry for freedom against oppressive governments but ended badly. There are no guarantees that Egyptians, Tunisians, or others will be better off after these heralded regime changes.

We do know, however, that these conflicts in Africa and the Middle East can be made worse if the U.S. government attempts to intervene and support certain candidates or factions. Such intervention would not further US interests or win us new friends, but in fact would undermine the legitimacy of any government that may emerge after the end of old regimes. Just as we would resent and reject any political force that came to power here with the sponsorship of a foreign government, Egyptians, Tunisians, Libyans, and others are not likely to take kindly to what they view as one US puppet being replaced by another US puppet. It is ironic, but the US government’s endless promotion of “democracy” overseas actually distorts and undermines democracy in targeted nations. The involvement of a foreign power often undermines true self-determination.

Radicals who understand this may use rising resentment and anti-Americanism as leverage to gain power, thus defeating the stated purpose of US involvement in the first place. I have never understood how the US government justifies subsidizing a newspaper or political party abroad in the name of promoting independence and pluralism. It makes no sense.

Unfortunately it seems to me that the administration has learned nothing from recent events in the Mediterranean region. Secretary Clinton emphasized several times at the committee hearing that “nothing is off the table” with regard to a US response to internal civil unrest in Libya. Since when is it our obligation to use political pressure or even military force to solve every problem overseas? Washington is currently buzzing with talk of “no-fly zones” and even a land invasion of Libya to aid rebel groups seeking to overthrow the Gadaffi regime. Some military leaders, including Defense Secretary Robert Gates, have rightly warned the more enthusiastic interventionists that such military operations can be enormously costly both financially and in lives.

The costs of trying to run the world are unsustainable, and we simply don’t have the money. Morally, it is inexcusable for the US to pick sides in such conflicts overseas, no matter how odious either side may be. Financially, it is no longer possible. The 2012 budget request from the administration for “international affairs,” which is code for “foreign aid”, is two and a half times larger than it was just nine years ago! As our economy shrinks at home, our obligations increase abroad. As our infrastructure crumbles at home, we continue to spend billions expanding infrastructure in places like Afghanistan and Iraq. If the interventionists have their way, no doubt we will be soon pay to reconstruct the infrastructure we destroy in a Libyan military operation. It does not take a genius to see that we are going broke, but Washington remains in denial and intent on business as usual. I fear that if we continue this way we may soon be out of business altogether.

The temporary shutdown in Egypt of Internet and other telecommunication services, as well as similar interruptions in other Middle East countries experiencing large-scale protests and rebellions, has galvanized hackers and human rights activists as well as U.S. foreign policy makers. The consequences may be not be what anyone expected.

The technologies for secure, private, fault tolerant communication via the Internet exist but have not yet been widely implemented or bundled together in a single, user-friendly system.

Internet pioneer Vint Cerf was asked in a recent interview whether there was technical solution to a government shutdown of the Net. The Internet “is controllable by the government, [so] it’s possible to turn off the Internet,” he said. The solution, mesh networking, “can be done without benefit of things like routers provided by Internet Service providers.”

Mesh networking makes each device on a network capable of routing data to any other device, with the ability to rapidly change paths in the event of an interruption or blockage.

A current project of Cerf’s, the Interplanetary Internet, designed to overcome the delays and interruptions to communications during space exploration, could also be adapted to handle a partial shutdown of Net communications by an authoritarian government during a political crisis.

Eben Moglen, a Columbia law professor and software freedom advocate, first proposed the Freedom Box – a tiny device that could provide private, secure, fault-tolerant Internet access using mesh networking – at an Internet Society of New York event in February 2010. He has since founded the Freedom Box Foundation, has some early prototype software and expects to have a fully working device available for under $100 in twelve months. Another project, diaspora, was inspired by Moglen’s proposal and is developing a more privacy-friendly alternative to Facebook. The Freedom Box and diaspora both use a decentralized, peer-to peer model for improved security and to give the user more control.

On February 15, Hillary Clinton’s gave her second annual Net Freedom Speech, which denounced the Egyptian government for its Net shutdown. The State Department now has a number of initiatives and grants for the development of Internet censorship circumvention technologies.

But governments often have different agendas and policies for different situations. Egyptian strongman Hosni Mubarek was viewed as a “force of moderation” before he became a “dictator” when the geopolitical winds shifted. As Clinton was making her speech, Wired reported that the FBI Pushes for Surveillance Backdoors in Web 2.0 Tools and an antiwar protestor in Clinton’s audience was roughed up when he turned his back to her. Would he have been unscathed if he had tweeted his protest?

Even with the best intentions, high-profile Internet freedom initiatives by nation-states can have unexpected consequences. Evgeny Morozov says of Clinton’s speeches:

Clinton went wrong from the outset by violating the first rule of promoting Internet freedom: Don’t talk about promoting Internet freedom.

The state of web freedom in countries like China, Iran, and Russia was far from perfect before Clinton’s initiative, but at least it was an issue independent of those countries’ fraught relations with the United States.

Today, foreign governments … are now seeking “information sovereignty” from American companies … Internet search, social networking, and even email are increasingly seen as strategic industries that need to be protected from foreign control.

The U.S military has developed open source software for secure, private communication on the Internet, however. The Tor project, which develops Tor, a tool for private, encrypted communication on the Internet, is used by many dissidents in authoritarian countries, as well as by Wikileaks, and was originally sponsored by the U.S. Naval Research Laboratory.

But not every such project has been as successful. The Haystack program, designed to help Iranian dissidents, actually endangered them because it was easily intercepted by the Iranian authorities due to flaws in its design. It received a huge amount of hype but the developer, Austin Heap, refused to allow security experts to examine it. Nonetheless, the U.S. Treasury Department granted Heap an Office of Foreign Assets Control license to export the software to Iran, in effect endorsing it. By the time it the software bugs became publicly known, the damage had been done.

Open source software advocate and cyberliberties activist Eric Raymond was also helping Iranian dissidents connect to the outside world at that time. He reflects:

… to protect your network, and yourself, you have to accept that you are going to have relatively little information about what your network partners are doing and what their capabilities are …. my rationally-chosen ignorance left me unable to form judgments about whether people in my network were lying to me. More subtly … it left me unable to form judgments about whether they were lying to themselves.

I don’t mean to excuse whatever lies Austin Heap may have told, but I do mean to suggest he may well have been his own first victim.

Open source software, where the inner workings of a program are available for public scrutiny, is essential when developing tools for secure communication in a highly insecure environment.

But open source is not a panacea. Take the case of OpenBSD, an open source operating system bundled with thousands of applications, which has been optimized for security by a team of the world’s best security experts. OpenBSD is sponsored by a nonprofit foundation and many of the programmers volunteer their time.

At one point the U.S. Defense Advanced Research Project Agency (DARPA) gave OpenBSD a grant, then rescinded it when OpenBSD project leader Theo de Raadt made remarks critical of the Iraq war.

In December 2010, de Raadt received an email alleging the FBI had paid some OpenBSD ex-developers to insert backdoors into the software. He was skeptical but immediately made the email public and invited an independent review of the relevant program code. A few bugs were fixed but no evidence of a backdoor was found. So even though the allegations turned out to be false, they succeeded anyway – as an act of psychological warfare – by destroying trust in the OpenBSD project.

George Orwell said:

… ages in which the dominant weapon is expensive or difficult to make will tend to be ages of despotism, whereas when the dominant weapon is cheap and simple, the common people have a chance…. A complex weapon makes the strong stronger, while a simple weapon — so long as there is no answer to it — gives claws to the weak.

At first it would seem that a social networking service like twitter, recently used by many protesters in the Middle East, would fit Orwell’s definition of a “simple weapon” that “gives claws to the weak”. But in fact the situation is much more ambiguous. Twitter is a for-profit corporation which must maintain large data centers and a complex infrastructure. And they are subject to many financial, legal and political pressures.

Internet freedom initiatives must be independent of political connotations, run on a decentralized infrastructure, and use technology that is subject to public review by security experts. Most importantly, users must have complete trust in the skills and integrity of the people providing those tools and services.

If they don’t the cure could prove worse than the disease.

Note: Wikipedia has a good list of other anti-censorship software.

Remember the late great Tea Party? The grass roots movement that made the political establishment quake? For one glorious moment it seemed as if a truly independent, average Joe/Joan movement might be gathering steam. A memory from that halcyon time: assorted TV pundits telling Republican leaders that Tea Party people “don’t like you guys either.” To which said leaders would put on a humble face and mumble something about how Republicans had lost their way and needed to get back on track. The out-of-control spending, corruption, and support for endless wars were missteps off the path of Republican core values.

In truth, no missteps were made. The Republican core was intact. Albeit shared with the Democrats. Out-of-control spending, corruption, and endless wars R both parties.

Though the following factoid has disappeared into the memory hole of ideological rewrites, a goodly number of those initially drawn to the Tea Party did not support endless wars. They supported the troops ’cause that’s a question of loyalty. But adventures-in-nation-building weren’t their thing. They were also concerned about losing civil liberties via Homeland Security overkill. And most Tea Party protesters blamed Wall Street, as much as government, for the financial meltdown of 2008. Lest we forget, the Tea Party really took off when the too-big-to-fail banks and other financial entities that partied with housing bubble paper were bailed out by taxpayers.

For a brief period the left was equally vociferous re the bailouts. But the moment of rapprochement between progressives and Tea Party types, along with the potential for game-changing coalitions, passed when it dawned on the left that coming down too hard on taxpayer infusions and massive government interventions might not set the right tone for passing health care reform. The Tea Party was way suspicious of government (almost as much as the 60′s counter-culture had been) and it was the wrong time to fan such suspicion. Instead ’twas time to ridicule and revile the masses of average Americans who feared that a government redo would make the failings of U.S. health care worse instead of better. That this fear might be based on, say, observation of the role federal policies played in inflating and eventually collapsing the housing market buttered no progressive parsnips. As for the fear that Obamacare would be Homeland Security in a nurse’s uniform, how paranoid was that?

While the left was in the basement mixing up the medicine and the Tea Party was on the pavement thinking about the government, the Republicans seized the time. Coming back strong as champions of the people and enemy of the political elite. (Insert row of laughing emoticons here.) Hoovering up the Tea Party and making it their own. The more the left trashed “tea baggers” the more the independent spark in the Tea Party dimmed. Tea talk started sounding more and more like the type of Republican conservatism dished by Limbaugh & company. Critiques of state capitalism, particularly as practiced during the Bush years, were out. So were thoughts of a third party. Union bashing was in. With public employee unions cast as evil incarnate.

After several years of government hearings and investigations into the 2008 financial meltdown, Republicans and Democrats have been unable to reach agreement on who-done-it. Republicans put the blame on the government sponsored mortgage giants, Fannie Mae and Freddie Mac; Democrats pin it on an insufficiently regulated Wall Street. No prime movers of subprime sleaze (hello Angelo Mozilo), or political enablers (hello Friends of Angelo), or major Wall Street sludge jugglers (too many for a shout out) have been prosecuted. Nor have new lending regulations staunched the growth of mortgage fraud in taxpayer-backed housing programs. However, we will be able to hang some teachers out to dry.

The concordance of big government and big finance that pumped the housing bubble and hence inflated hauls of real estate derived taxes (including property taxes) was not why so many local governments overextended themselves during the boom years and now face disaster during the bust. The real villains were teachers, firefighters, police officers, sanitation workers, and secretaries in public agencies. Aka Joe and Joan Average with a government job. Who, according to the bashers, are not average at all ’cause they get better benefits and more job security than a private sector employee or a small business owner. That being a private sector employee or a small business owner has its own set of advantages butters no conservative parsnips. The right, which typically decries attempts to stir up class warfare, is passing out flaming torches and whipping up envy. Screaming for folks to be stripped (preferably in public?) of their collective bargaining rights. Working to turn the American middle-class against itself.

And I thought only lefties were into creating social chaos…

Incidentally (or not) while the billionaire Koch brothers donated $43,000 to the gubernatorial campaign of union-busting Wisconsin Governor Scott Walker, housing and Realtor groups kicked in $43,125. Not that Republicans in general are uniquely blessed by the real estate industries. In New York, another state with budget problems, the NYC real estate crowd has been particularly generous to Governor Andrew Cuomo.

As for Joe and Joan Average, who really represents them? The left or the right? Answer: neither. At least, not reliably. Under certain self-serving circumstances both do an occasional good deed. But when push comes to shove in our state capitalist times, Joe and Joan are on their own. Which is less discouraging than it sounds. Being independent means never having to say you’re sorry for noticing that your representatives, no matter how rhetorically righteous, primarily rep big money conjoined with government power.

Third party, anyone?

Carola Von Hoffmannstahl
Mondo QT

Ah, mortgage fraud. The unsung power tool of the housing bubble. Starting around 1999, the FBI issued repeated warnings that mortgage fraud was surging. Few in government listened. Fraudsters ranged from organized cross-country rings of real estate, banking, and investment professionals, to non-profit profiteers and Joe and Joan Doakes lying on mortgage aps ’cause they just had to have that house. Feeling nostalgic about the big grift that sent no major players to jail but left taxpayers holding the Hefty and the landscape blotted with foreclosures? No need. Boom or bust, the impetus for mortgage fraud is a constant. When housing is hot there’s pressure to keep the market booming, in bust mode there’s pressure to jack it back up.

According to Core Logic (a leading provider of business information), after taking a breather in 2009 mortgage fraud increased more than 20% in 2010. (The Mortgage Asset Research Institute reports that Florida and New York lead the nation at number one and two respectively.) With government now owning or insuring 97% of mortgage bonds via Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA), taxpayers are on the hook more than ever. And they’re paying for new twists. Quoting* mortgage fraud attorney L. T. Lafferty, a former federal prosecutor specializing in white collar crime, “fraud is … perpetrated differently when there are different opportunities.”

When one door closes, another opens…

Loan origination fraud, a mortgage fraud staple, is seeing new emphasis on hiding debt and liabilities. (Prior mortgage defaults? No problem.) Due to increased requirements for proof of income, credit, etc., mortgage fraud rings increasingly rely on identity theft rather than fake documents — thereby involving a wider circle of victims. Then there are the homebuilders with a glut of houses or condos who offer buyers financial incentives that aren’t disclosed to lenders. After buyers obtain loans, builders welch on the incentives. Oops, more underwater mortgages. Faked occupancy is on the rise. (Loans for second homes, and for rental properties without an owner in residence require larger down-payments and higher interest rates.) And hey — foreclosure rescue scams are on fire! Loan modification, refinancing, short sales, real estate owned (REO) sales, and government sponsored programs are being mined big time. Of course, almost the entire housing market might now be called a government sponsored program…

To date, taxpayers have kicked in $153 billion just to prop up Fannie Mae and Freddie Mac. Fan and Fred’s oversight agency (an organ of the FHA) estimates that the agencies’ losses through 2013 will require another infusion of between $68 billion to $210 billion. In government speak, a massive transfer of wealth from the general public (roughly one third of whom are renters) to cover a mountain of bad private assets is called an “investment.”

In Washington, the Obama administration and Congress are trying to hammer out a plan for “weaning the $11 trillion mortgage market from its dependence on government.”** The weaning, which will allegedly include the waning of Fannie Mae and Freddie Mac, must be done carefully and slowly so as not to damage the fragile housing market. (When the market was robust, reform was rejected ’cause it might damage the boom.) A time frame of five to seven years has been mentioned. By then the full wean will be in the hands of the next administration. In the meantime, the real estate lobby is beating down doors in DC, to make sure that nothing (untoward) is accomplished. The National Association of Realtors, the American Bankers Association, the National Association of Home Builders, the National Council of State Housing Agencies, and the National Fair Housing Alliance are united by their determination to protect folks from being cheated out of the American Dream of Home Ownership.

Do Mollusks Dream of Electric Drills?

Mortgage fraud isn’t the only real estate product backed by taxpayer investment. There’s always (forever and ever) urban revitalization. Point of info: investment in urban revitalization does not put the truly needy in safe, clean public housing and bring industry back to fading blue collar cities. Instead it pumps luxury condo enclaves, twee art and restaurant districts, and political corruption. Perhaps no place exemplifies this type of urban revitalization better than Hoboken, New Jersey. A small (one mile square) waterfront town across the Hudson River from Manhattan, which after biting post-industrial dust was reborn as the jewel of government-backed new urbanism. That almost all of Hoboken’s blue collar residents were pushed out of town in favor of wealthier professionals largely employed by Wall Street mattered not. Gazillion urban planners saw the future and it was Hoboken.

What they didn’t see were the mollusks. More about them in a minute. First, the corruption. Everyone saw the corruption. Over the roughly three decades in which Hoboken became the revitalized gem of Jersey’s “Gold Coast,” developers and public officials from Hoboken and its parent entity Hudson County, went down like nine pins; bowled over by federal and state investigations frequently targeting corruption related to government-backed development projects. The U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Transportation were soaked again and again. As were assorted state agencies. Tax breaks were/are crony candy. Hudson County’s other cities revitalized their historic corruption with equal fervor, inspired by Hoboken’s new urban success.

Hoboken eventually became one of the most valuable chunks of real estate in the country. Yet taxpayers have never stopped investing in its revitalization. The promenade that stretches along the city’s condo-lined waterfront was a mega investment. The walkway and its park areas are open to the public. Hoboken’s master builders would have preferred waterfront access to be restricted to condo dwellers but local green space activists fought not only to keep it open, but to expand the walkway into an unbroken strip running along the entire Gold Coast. Since public largess was powering waterfront development, developers had to bend. Pols scrambled to speed their plow, cutting government red tape re construction. In Hoboken the promenade was largely in place by the 1990′s. New Jersey’s Department of Environmental Protection signed off on it every step of the way.

Now we get to the mollusks.

The first cave-in on Hoboken’s promenade occurred in 2007, at Castle Point Park in mid Hoboken. Just a small collapse. No cause for alarm. But two years later, part of a sports field that had been built atop a pier slid into the Hudson. When the field was developed in the 90′s engineers warned that the pier’s pilings were infested with shipworms, a type of mollusk. Shipworms eat wood. Suggestions were made that the pilings be replaced with something less tasty. The suggestion went into the memory hole.

In early 2010, a section of the walkway in the north, near a cove between Hoboken and Weehawken collapsed. Last October, a fifty foot sinkhole opened on Frank Sinatra Drive. (Sinatra was a Hoboken boy.) The drive, which is 13 years old, runs along the river in front of a strip of luxury condo towers — including one which houses former NJ governor and ex Goldman Sachs boss Jon Corzine. The sinkhole, which was also allegedly caused by mollusks, followed two smaller collapses on Sinatra. Recently, engineers determined that the steel beams supporting Pier A, a popular park on the south end of the promenade near Hoboken’s train and ferry stations, need a makeover. Seems the concrete jackets on the beams aren’t covering all they should. No danger from salt water corrosion yet. Just being proactive. Pier A is like, totally safe.

Despite all the wealth that hangs in Hoboken, the city has severe financial problems. Hoboken isn’t the only entity responsible for repairing the collapsing waterfront (as example, Sinatra Drive was a county project) but the city will have to cover much of the rehab. The cost will be more than the entire city budget. Massive debt will be assumed via bonding. According to the New York Times,*** Mayor Dawn Zimmer (elected in 2009) is holding out “hope for state and federal aid.” And Hudson County is hoping to obtain federal grants to repair the Sinatra sinkhole. As for the mollusks, they have high hopes for more wood.

*Mortgage Fraud: Worse Before Better, Expect More Schemes and More Regulatory Oversight in 2011, Tracy Kitten, Managing Editor, Bank Info Security, 02/04/11

**Obama Administration Calls for Winding Down Fannie, Freddie, Lorraine Woellert and Rebecca Christie, Bloomberg News, 02/11/11

***As Hoboken’s Riverfront Crumbles, the Cost for Repairs Soars, Richard Perez-Pena, New York Times, 02/08/11

The events in Egypt of late have captured the attention of the world, as many thousands of Egyptians take to the streets both in opposition to and in favor of the current regime. We watch from a distance hoping that events do not spiral further into violence, which will destroy lives and threaten the livelihoods of average Egyptians caught up in the political turmoil.

I hope that Egyptians are able to work toward a more free and just society. Unfortunately, much of the blame for the unrest in Egypt and the resulting instability in the region rests with US foreign policy over the past several decades. The US government has sent more than $60 billion to the Egyptian regime since the Camp David Accords in 1978 to purchase stability, including more security for the state of Israel. We see now the folly of our interventionist foreign policy: not only has that stability fallen to pieces with the current unrest, but the years of propping up the corrupt regime in Egypt has led the people to increase their resentment of both America and Israel! We are both worse off for decades of intervention into Egypt’s internal affairs. I wish I could say that we have learned our lesson and will no longer attempt to purchase — or rent — friends in the Middle East, but I am afraid that is being too optimistic. Already we see evidence that while the US historically propped up the Egyptian regime, we also provided assistance to groups opposed to the regime.

So we have lost the credibility to claim today that we support the self-determination of the Egyptian people. Our double dealing has not endeared us to Egyptians who now seek to reclaim their independence and national dignity.

“Diplomacy” via foreign aid transfer payments only makes us less safe at home and less trusted overseas. But the overriding reality is that we simply cannot afford to continue a policy of buying friends. We face an ongoing and potentially deepening recession at home — so how can we justify to the unemployed and underemployed in the United States the incredible cost of maintaining a global empire? Moral arguments aside, we must stop sending hundreds of billions of dollars to foreign governments when our own economy is in shambles.

American media and talking heads repeatedly pose the same loaded questions: Should the administration encourage the Egyptian president to remain or to resign? Should the US ensure Mohamed ElBaradei or current vice president Omar Suleiman succeeds current president Mubarak? The best answer to these questions is that we should just do nothing, as Eisenhower did in 1956. We should leave Egypt for Egyptians to figure out. Some may claim that this is isolationism. Nothing could be further from the truth. We should enthusiastically engage in trade and allow travel between countries, but we should stay out of their internal affairs. We are in fact more isolated from Egypt now than ever, because the regime we propped up appears to be falling. We have isolated ourselves from the Egyptian people by propping up their government, as we isolate ourselves from Tunisians, Israelis, and other recipients of our foreign aid. Their resentment of our interventionist policies makes us less safe, because we lose our authority to conduct meaningful diplomacy when unpopular regimes fall overseas. We also radicalize those who resented our support for past regimes.

Let us hope for a more prosperous and peaceful era for the Egyptians, and let us learn the lessons of our thirty year Egyptian mistake.

Protesters fed up with political repression, corruption and poverty (particularly recent food price inflation) toppled the government of Tunisia. They threaten to do the same in other countries throughout the Mideast as pundits hail the “Twitter and Facebook revolution.” But repressive governments have as much compunction about shutting down communication services as they do about torturing dissidents.

Egypt has cut all Internet access and most mobile phone service as huge protests threaten to topple that government. For a while the ISP Noor remained online — largely because it connects the country’s Stock Exchange and many offices of foreign companies to the outside world. Noor has now been cut off as well.

Interestingly, Egypt and Tunisia have some of the largest percentages of the population online in Africa. Egypt’s Communications Minister, Tarek Kamel, was secretary and co-founder of the global Internet Society’s Egyptian Chapter (which is no longer active). He is still listed as a member of the Board of Trustees on the Internet Society’s website. The Internet Society has strongly denounced the Internet shutdown.

Kamel is widely recognized as the person who brought the Internet to Egypt. He has publicly supported the open development of the Internet. His bio on the Internet Society’s website states that in the early years of the development of the Internet in Egypt, “Kamel’s work extended into liberalization issues such as a tax reduction for ISPs as well as a government/private sector partnership to serve the Egyptian Internet community. He has actively participated in the establishment of community centers in remote areas to bring the Internet to the have-nots.” His role in the shutdown is unknown, although he wasn’t among the cabinet members removed in the shakeup of the Egyptian government in the wake of the protests.

Cutting off most communication with the outside world for an extended period would be economic suicide for any modern, developed country, but temporary interruption — long enough to kill or imprison a large number of protesters without too much visibility for squeamish foreign allies — is viable for a poor country ruled by an elite supported by gifts of military technology from wealthier countries.

The protesters’ vulnerability is relying on highly centralized communication networks and services while fighting an overly centralized political system. The younger ones probably don’t have any memory of being without mobile phones and the Internet and may have taken them for granted.

To succeed in the face of violent repression and the shutdown of Internet and phone service, they must quickly develop low-tech strategies that are as fast and flexible as the ones that have been lost.

Another approach is to build communication services that cannot be intercepted or shut down. Human rights activists and hackers are already starting to do it with combination of low-cost commodity hardware and free open source software:

• Landlines still work in Egypt and a French ISP FDN offers free dialup Internet to Egyptians. Instructions to connect to foreign ISPs via dialup with a mobile phone are also being circulated for those who can use them.
• For Egyptians who are still able to use their mobile phones, there is Sukey, “a security-conscious news, communications and logistics support service principally for use by demonstrators during demonstrations.”
• Tech entrepreneur Shervin Pishevar put a call out on Twitter for volunteers to help construct self-configuring unblockable mobile ad hoc networks to prevent government caused blackouts during future protests worldwide.
• We Rebuild, a Europe-based group working for free speech and an open Internet is developing non-Internet modes of communication, including amateur, shortwave and pirate radio as well as a fax gateway, to assist protesters and humanitarian relief efforts. Information on these efforts can be found on their Telecomix news site.
• Remaining Internet activity is certainly being monitored. The Tor network of anonymous, encrypted proxies has seen a huge increase in Egyptian traffic.

Efforts like these could be the tipping point for the uprisings. In 1989 Czech student protesters received a gift of then state of the art 2400 baud modems from a mysterious man who may have been from the covert-operations wing of the Japanese embassy. Modems were illegal but the most Czech police didn’t even know what they were. The students set up BBS systems to coordinate actions throughout the country and successfully overthrew the Soviet communist backed dictatorship.

If you think the problems people in Egypt have could never happen here, you might want to think again. In the U.S. the “Internet kill switch” bill in Congress would allow interruption of Internet services in a “national cyberemergency.” Senator Joe Lieberman, who introduced the bill in the Senate, has described the Internet as a “dangerous place” and promised the bill would protect against “cyber terrorists.”

Some of our current political leaders, hanging on every word of their consultants and pollsters, and terrified of harsh criticism, might consider hostile online commentary more of an “emergency” than something trivial like say, a collision with an asteroid.

General Douglas MacArthur said, “No man is entitled to the blessings of freedom unless he be vigilant in its preservation.” Today that vigilance means learning to build and modify the technology that we use rather than being passive consumers of it.

Incredible that 9/11 is almost ten years ago. So much has changed. Including our attitude about free speech. After 9/11, it suddenly felt necessary to lower your voice in restaurants when criticizing the government. Who knows — waxing negative about U.S. policies in the Mideast might cause folks in the next booth to alert Homeland Security that a terror symp was downing a burger at Joe’s Grease N’ Go.

Speaking of grease and go, as the prep for invading Iraq ramped up so did attacks on speech. Pro-war pundits (aka the laptop bombardiers) suggested — or outright declared — that the various progressives, libertarians, and paleocons who expressed doubt about attacking a country that had nothing to do with 9/11, were traitors. Numerous patriots called for the heads of antiwar celebs. Sure, some of the latter were knee jerk anti-American. But since when does getting your britches in a bunch over the opinions of singers and actors qualify as “standing tall”? Then there was our much vaunted free press…

Until polls showed public support was waning, most of the fourth estate banged the drum for the Iraq war and kissed the rump of the Bush administration. Those on the right like to say that the mainstream media is overwhelmingly liberal. Maybe so in sentimental moments. But ultimately they worship at the altar of triumphant big government.

As Iraq wore on, and over several election cycles, tolerance of free speech seemed to be reviving. But the revival never completely took hold. Speech was still more likely to be viewed as a weapon rather than protected expression. The tendency was encouraged — and simultaneously made manifest — by broad, imprecise, and propagandistic terms such as “War On Terror” and “Hate Speech.”

Terrorism and discrimination are specific actions that can be defined and addressed. Terror and hate haunt the human condition. Both also have a non-evil place. Is it wrong to hate cruelty to children? Some wars are just; should military forces on the side of the angels not strive to inspire terror in their enemies?

Note re just wars: the Catholic Church under Pope John Paul II did not deem Iraq a just war. The Catholic theory of just wars doesn’t cover speculative ventures. Fighting Nazi invaders is one thing, attacking countries you perceive might pose a threat in the future is another. Self-serving motives are too likely to influence the perception of “threat.” (Catholicism can be so cynical about human nature.) Advocates of the war were annoyed that His Holiness didn’t get American exceptionalism. Neocon Catholic philosopher Michael Novak made like Henry VIII and tried to get the Pontiff to bend. Sorry, no divorce. Catherine is still your true wife.

Circa 1980′s, neocons had lauded John Paul II for his support of Solidarity, the non-governmental labor movement in Poland that triggered the fall of communism throughout the Eastern bloc. But the not-a-just-war decision blotted the Catholic copybook big time. (Besides, who wants to remember good things about unions?) Some on the right were so bugged by the Pope’s intransigence that they borrowed a meme from the left and snarked about pedophile priests. Bipartisanship is indeed possible!

Suppression of speech is another issue on which left and right can come together. Albeit with different apps. The left, which once championed free speech to the max, is traveling fast down the road of suppression. Covering over nasty words the way Victorian ladies allegedly covered furniture legs.* Baying for “civility.” Seeing hidden, murderous intent in political rhetoric and thought crime in dissent. Depicting non-compliant citizens as slaves to the right-wing rhythm. Meanwhile, those on the right who believed being against Bush and the Iraq war was treason, are outraged by those on the left who deem Tea Party talk inflammatory.

Though some may find it difficult to define inflammatory speech (in terms of directly connecting one person’s rhetoric to another person’s destructive action) both left and right have no problem recognizing it. Particularly when folks with whom they disagree are speaking it. As for all of us outside neat little ideological circles, it’s important to remember that suppression of speech, once started, tends to spread.

First they came for Sarah Palin and I snickered ’cause I’m not a right wing nut. Then they came for Keith Olbermann and I laughed ’cause I’m not a left wing loon. Then they — Oh. Wait. Who’s that knocking on my door?

Carola Von Hoffmannstahl-Solomonoff
Mondo QT

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* Victorian ladies are oft said to have covered furniture legs with shawls in order to prevent said legs from arousing impure thoughts in male guests. The story is most likely apocryphal. Myriad photos from the period show plenty of naked leg. On the furniture, not the ladies.