Wall Street Journal: The Bernanke Reflation. The people who aren’t being fooled by all this are the American people. They don’t pay their bills with “core” dollar bills, and they know those dollars buy less with each passing month. This explains their rising economic anxiety — and anger — better than trade or job losses do, especially since the job market has remained relatively healthy. Inflation is the great thief of the middle class, as even Americans who don’t recall the 1970s are learning. With its all-in reflation bet, the Bernanke Fed is gambling with their money.

They are exactly right about this. To “cure” the hangover from the credit bubble — which the Fed helped create — the Fed is now aiming us into potential hyperinflation.


I have a column running on the Guardian’s website today. It’s entitled “Freedom of information” — and is reprinted below:

What does a Swiss bank that does business in the Cayman Islands have in common with a Hong Kong actor who jets around the globe? They are object lessons this month in a reality that anyone handling information needs to understand. Like toothpaste squeezed from a tube, information, once out in the wild, is all but uncontainable.

The Julius Baer Bank is a protagonist in the now-famous Wikileaks case. The bank’s lawyers managed to persuade a US federal judge, Jeffrey White, that the first amendment of the US Constitution had no meaning, obtaining an injunction and follow-up order that, among other things, required blocking the visibility of the domain wikileaks.org in the internet’s Domain Name System (DNS). A former bank employee had posted documents on the anonymous whistle-blowing website, allegedly describing shady dealings – hmmm, Cayman Islands, Swiss banks – on behalf of clients.

“The orders don’t just direct the take down of existing content, they also enjoin any future publication of the material,” says David Ardia, director of the Citizen Media Law Project at Harvard University Law School’s Berkman Center for Internet & Society (of which I’m a co-founder). “Even more significantly, the second order requires anyone who receives notice of the order to refrain from publishing, distributing or linking to the documents.”

In a blog post on the project’s site, Ardia called the judge’s action “unthinkable”:

“He issued an order that is so broad I haven’t been able to find a single example in the US that comes close: he ordered the complete shutdown of the Wikileaks website. He did this not by ordering that the parties shut off access to the offending documents (that came in a second order), but by ordering that [Wikileaks’s domain registrar] erase the ‘navigation information’ that directs people to the site … . That is like telling a newspaper it can continue to print its paper, but the delivery drivers all have to go home.”

The judge blatantly abused his power. Luckily, due to the nature of the internet and the anger of the online community, it had precisely the opposite effect of what was intended.

First, Wikileaks’s proprietors are not stupid. They have several “mirror” sites with other domain names (such as wikileaks.be) where the bank documents, among 1.2 million other documents contributed by whistle-blowers around the world, can also be found. Meanwhile, people sympathetic to Wikileaks immediately began putting up their own mirrors and distributing the documents in question. And due to the judge’s (and bank’s) utter cluelessness about how the internet actually works, the injunction (essentially a rubber-stamp of something the bank’s lawyers wrote) didn’t prevent the Wikileaks site from being visible via its more direct URL – – which the DNS translates into words we recognise.

If I were a customer of that bank, I’d quickly withdraw my business on several grounds, not least the institution’s inability to keep records secure in the first instance but also the way it flailed about once the records were public. (If I were a member of the US Congress I’d be launching an official inquiry into judge White’s fitness for office as well, though Congress is not noted these days for its understanding of, much less appreciation for, the Constitution.)

But the bank’s dilemma does elicit some sympathy, and suggests a larger issue that proponents of whistle-blowing and transparency – count me loudly among them – should acknowledge. The dissemination of information may be all but unstoppable, barring an absolute crackdown on and censorship of all online data (which could never be fully effective in any event). But there are troubling implications.

Consider, in that context, the sad case of Edison Chen, a Vancouver-born actor who now makes his base in Hong Kong. He famously took photographs of himself and at least five women (sequentially, not all together) in sexual situations and stored them on his laptop computer. After he took the machine for repairs, the photos made their way to the internet, apparently copied by a technician at the shop and then put online. It is trivially easy to find the images online now.

This was not about blowing whistles on possible corruption. Chen doesn’t deserve this, however foolish he was to leave the pictures, unencrypted, on a disk that he put in someone else’s hands. The women especially don’t deserve it, however foolish they were to participate in the photo sessions. These pictures were never meant to be public, and the people who participated in their distribution – including, in my view, anyone who continues to send them around – are morally and legally wrong. (Disclosure: I did obtain them to verify how easily this could be done, and then immediately deleted them from my computer.)

Chen, the women and the authorities can and probably should pursue various legal remedies to punish whoever put the photos on the internet. Apart from asking the rest of us to be decent and honourable, however, they have few further options.

The situations of Julius Baer Bank, Edison Chen and a host of others are fodder for the control freaks of our age. Governments and big business fear their power will dissolve. Moral crusaders fear almost everything. They all quake at the consequences of what they consider liberty run amuck.

So there are powerful forces at work to clamp down on this infinitely valuable medium. It can never be a 100% solution, of course, because digital information can be encrypted, disguised and otherwise manipulated to make porous even the most seemingly impenetrable barriers. But the rich and powerful interests that want to control our lives can make it vastly more difficult to have any measure of free speech.

I tend toward the absolutist side of the argument. Yes, there are negative consequences to freedom. Liberty brings risk. We take those risks because they are essential to progress, and to fundamental human rights. Abuses by the wielders of great power are much more dangerous than those by the rest of us.

But that doesn’t absolve us from doing the right thing. Let’s keep the control freaks at bay, but exercise some self-control, too.

Christopher Hitchens: Who needs a state censor when the press bites its own tongue so effectively? Do you ever wonder what is the greatest enemy of the free press? One might mention a few conspicuous foes, such as the state censor, the monopolistic proprietor, the advertiser who wants either favorable coverage or at least an absence of unfavorable coverage, and so forth. But the most insidious enemy is the cowardly journalist and editor who doesn’t need to be told what to do, because he or she has already internalized the need to please—or at least not to offend—the worst tyranny of all, which is the safety-first version of public opinion.

Firedoglake: The FISA bill passed by the Senate is a disgrace. By legalizing warrantless spying on Americans and granting retroactive amnesty to lawbreaking telecoms, the Senate seeks to ensure that the Bush administration’s illegal spying programs are never investigated or subjected to the rule of law. The Senate bill is a profound betrayal of the votes of millions of Americans who voted in 2006 to put Democrats in control of Congress in order to increase, not eliminate, checks and oversight on this administration, and to restore the rule of law to our country.

The above link goes to an online petition that you will want to look at, and perhaps sign.

It is frightening to watch our elected officials systematically shred the Bill of Rights. Now they’ve given a free pass to a president and his lapdog telecommunications companies that deliberately, knowingly broke the law to vastly expand government surveillance of U.S. citizens in their own homes and businesses — we still don’t have a clue how widespread this practice was, or remains — without even the pretense of a warrant or honoring explicit legal prohibitions against such acts.

Glenn Greenwald summed it up well:

What were the consequences for the President for having broken the law so deliberately and transparently? Absolutely nothing. To the contrary, the Senate is about to enact a bill which has two simple purposes: (1) to render retroactively legal the President’s illegal spying program by legalizing its crux: warrantless eavesdropping on Americans, and (2) to stifle forever the sole remaining avenue for finding out what the Government did and obtaining a judicial ruling as to its legality: namely, the lawsuits brought against the co-conspiring telecoms. In other words, the only steps taken by our political class upon exposure by the NYT of this profound lawbreaking is to endorse it all and then suppress any and all efforts to investigate it and subject it to the rule of law.

No one who cares about national security — and that includes people who oppose this abdication of duty by the senators — has ever opposed surveillance on actual terrorists or suspects. A system in place for several decades has ensured timely surveillance, and after the fact approval by a special court (a rubber stamp, for the most part). But it has at least ensured that Americans aren’t spied upon by their government without any oversight by anyone.

Yesterday’s majority comprises people who no longer believe that liberty matters. They do believe that power is all, and they and their friends hold it at the moment. They are people who believe that the rest of us answer to increasingly draconian laws and the people at the top answer to no one but themselves. This line of thinking appears to apply almost universally in the Republican party, and widely among elected Democrats.

Not a single Republican — what bogus “conservatism” they practice — voted to hold these companies, never mind the lawless administration, responsible for their lawbreaking; instead Republican senators, and a crew of Democrats who followed like the political cowards they have become, voted to make the criminal behavior legal. John McCain voted against an amendment that would have taken away this retroactive immunity for criminal corporations. Obama voted for the amendment but didn’t vote on the final bill. Clinton was entirely absent; she has little credibility on civil liberties in any case.

I wonder if people who call themselves conservatives are comfortable about having given this kind of power to a President Obama. Possibly, because they probably believe his actual honor will prevent him from abusing it against them. Do they rely on the same notions regarding a President Hillary Clinton, who may soon enough be wielding this power in a brutal fashion against her many enemies, not just terrorism suspects? She is at least as ruthless, I suspect, as Bush, Cheney and their collaborators. For all the wrong reasons, they may come to regret their lockstep dismantling of civil liberties during the current administration.

There are few heroes in this sad tale. One semi-heroic organization is the New York Times, which broke the story about this lawbreaking but held it, at the fervent request of the Bush administration, for more than a year — a story it knew about during the 2004 campaign but kept under wraps until after Bush had won another term in office. For all that, right-wing critics called for the newspaper’s prosecution.

The other hero is Connecticut’s Democratic senator, Chris Dodd, who made restoring presidential lawfulness a centerpiece of his failed campaign for the nomination and who fought this bill, hard. He is a champion of liberty, a true one.

Now it’s up to the House of Representatives to hold firm on at least keeping corporate America halfway honest. It’s too likely that the Democrats there will fold as well, but let’s hope for the best.

The first step toward a police state is to create a surveillance state, and to let the powerful collaborators in this practice break laws with impunity. We are now moving down a path that should make true patriots fear for the future of the republic.


Good grief. Look at the members of ProPublica’s Journalism Advisory Board:

Jill Abramson, a managing editor of The New York Times; Martin D. Baron, the editor of The Boston Globe; David Boardman, the executive editor of the Seattle Times; Robert A. Caro, historian and biographer of Robert Moses and Lyndon Johnson; John S. Carroll, the former editor of the Los Angeles Times and the Baltimore Sun; L. Gordon Crovitz, a former publisher of The Wall Street Journal; David Gergen, professor of public service at Harvard’s John F. Kennedy School of Government and director of its Center for Public Leadership; Shawn McIntosh, the director of culture and change at The Atlanta Journal-Constitution; Gregory L. Moore, the editor of The Denver Post; Priscilla Painton, the new editor-in-chief of Simon & Schuster; Allan Sloan, a senior editor at large for Fortune magazine; and Cynthia A. Tucker, the editor of the editorial page of The Atlanta Journal-Constitution. The Board will advise ProPublica’s editors from time to time on the full range of issues related to ProPublica’s journalism, from ethical issues to the direction of its reporting efforts.

Great people and journalists, every one of them. But what a disappointing list in one major respect.

This is not a group with any serious understanding of the Web, nor a board that will instantly grasp why the new digital platforms are made to order for melding traditional investigative journalism with what technology enables. Not one of these people is a digital native, or even close to it.

That’s a stunning oversight, and it the journalism will almost certainly reflect it.

UPDATE: Paul Steiger, ProPublica’s editor in chief, replies via email: “Understood and anticipated. Watch whom we hire.”

NY TImes: Putting Candidates Under the Videoscope. (T)he embeds have changed the dynamic of this year’s election, making every unplugged and unscripted moment on the campaign trail available for all to see. One particular video shot of American flags tilting over behind Hillary Rodham Clinton last November has been viewed more than 300,000 times on the ABC News Web site. A video of the Fox News host Bill O’Reilly shoving a member of Barack Obama’s staff at a New Hampshire campaign rally has drawn almost 150,000 views on YouTube.

The dynamic was changed earlier, actually — supporters and opponents have been making videos of candidates for some time. What has changed is the notice of this by major media organizations as an endemic part of the process.

What is still not part of the understanding is the sheer unfairness of letting a single moment on video reflect a person’s reality. Yet this is what seems to happen on a regular basis.

When, as in the case of former Sen. George Allen — he of the famous “Macaca” comment — there is a history of racially charged words and deeds, then you have something worth discussing. When it’s simply one of those weird moments on the campaign trail, it’s nothing or close to it.

I could follow anyone reading this with a video camera for an hour and post something on the Web that would make you look ridiculous. You could do the same to me. Neither posting would reflect who we really are.

A culture of gotcha is a shallow culture. Is it the one we really want to promote?

Marc Andreessen has inaugurated “the New York Times Deathwatch” — and the data he cites should be giving the Times-folk nightmares. But then, the company’s board of directors is a particularly inept group considering the absolute need to move, fast, into the digital world for real, with all that means.

Marc writes, with utterly appropriate snark, of this crew:

Well, given that the Internet is the central force dismantling the company’s business, I’m sure that by now they’ve stocked their board with noted Internet experts. Let’s see:

  • Brenda C. Barnes — CEO of Sara Lee; noted snack cake expert
  • Raul E. Cesan — former CEO of Schering-Plough; noted Levitra expert
  • Daniel H. Cohen — president of DeepSee LLC, “an oceanic exploration and submarine leasing company”; noted Jacques Cousteau expert
  • Lynn G. Dolnick — former head of exhibits for the National Zoologic Park in Washington DC; noted marsupial expert
  • Michael Golden — current publisher of the International Herald Tribune; former head of the company’s Women’s Publishing Division; noted sundress expert
  • William E. Kennard — former head of the FCC; noted “seven dirty words” expert
  • James M. Kilts — former CEO of Gillette; noted smooth, smooth shave expert; prior to that, unindicted coconspirator at Philip Morris; noted expert on your grandfather’s hacking cough
  • David E. Liddle — here I have to take a pause as I actually know this one; based on what’s happening at the company, it could be reasonably asked whether he’s actually attending the board meetings.
  • Ellen R. Marram — former CEO of Nabisco; noted Oreo expert. Oh, wait, she actually ran an Internet company: “From 1999 until 2000, Ms. Marram was president and chief executive officer of efdex Inc. (the Electronic Food & Drink Exchange), an Internet-based commodities exchange for the food and beverage industry.” Ooh. I wonder if that ended well.
  • Thomas Middelhoff — former CEO of Bertelsmann; noted expert on complicated family politics — well, that’s probably coming in handy…
  • Janet L. Robinson — current CEO of the New York Times Company; noted expert on horrific business implosions
  • Doreen A. Toben — CFO of Verizon; noted 30-year debenture expert
  • And finally, Arthur O. Sulzberger, Jr. — the Big Kahuna — the Man — the Guy In Charge — the chairman and scion — the dude with the cojones to actually defend Judy Miller. Not noted Internet expert.

Now, some hedge-fund investors who quite plainly care only about the money — and not the public trust aspect of publishing the nation’s best and most important newspaper — are trying to persuade the company to add some board members who have a clue. One of the people they hope to put on the board is Allen Morgan, a friend who is managing director at Mayfield Fund in Silicon Valley. He gets this stuff more thoroughly than almost anyone I know.

I own some NY Times Co. shares, and they’re worth a lot less than I paid for them. I will continue to hold these, even if the company utterly tanks, because I believe in the mission of newspapers and believe the Times has some of the best journalists in the world and could make the move to the Net much better than it has done to date — and that there is absolutely no choice but to move more quickly.

The hedge fund speculators could care less about journalism or the public good, no doubt. But they’re doing a stodgy institution a huge favor. Sadly, the institution is so hidebound that it doesn’t recognize the writing on its own wall.