Monday, April 26, 2010

Richard Clarke: "Cyber War: The Next Threat to National Security"

Authors: Richard A. Clarke and Robert K. Knake

Title: "Cyber War: The Next Threat to National Security and What to Do About It"

Publication: ECC, Harper; 2010; ISBN 978-0-06-196223-3; Introduction and 8 long chapter, glossary; 290 pages, hardcover.  Amazon link.

When I was working on my first “do ask do tell” book in the 1990s and justifying the idea that the military gay ban really was a national security issue, I still thought that Communism (especially North Korea) or hyper-nationalism (as in Russia) was still the big threat; I didn’t yet grasp how dangerous radical Islam had become. If you had talked to a lot of “good Democrats” in the 1990s, including President Bill Clinton, you probably would have found agreement.

And as far cybersecurity, the biggest threat to a total meltdown probably does come from hostile governments remaining from the Communist world. That is one theme of Richard Clarke’s book. After all, jihadists need a functioning Internet to spread their propaganda and recruit. And teenage hackers probably don’t have the skills or connections to do the kind of damage that Clarke is talking about. But hostile governments do, and some of them might well become tempted to do so, even as you compare “pre-emption” doctrine with respect to cyber issues to older Cold War issues of nuclear deterrence and MAD.

A critical part of Clarke’s thesis is that there really are a lot of “back door” connections between our critical infrastructure, especially the electric power grid, and the public Internet, even if the “average” pesky programmer would have no idea how to find or exploit them.

In general, a defense strategy is more important in cyber security policy than it was in the Cold War. The United States does probably lead the world in the ability to cyber-spy or corrupt enemies, but our own infrastructure is much more dependent on cyber capability and much more easily attacked by a enemy that knows what it is doing (probably a government).

The centerpiece of the book outlines a “triadic” or three-prong approach. First, ISP’s (especially the Six Sisters among the telecomm providers) should be required to let end users know when their computers are compromised (and used for DDOS botnets), and end users probably should demonstrate some competence in Internet security and using security products (that sounds like the “Internet driver’s license). Second, much more attention should be focused on the systems that run critical infrastructures, and they really should be separated completely into “intranet-like” objects. Third, the military needs to be reformed. I could chuckle here that the old “don’t ask don’t tell” policy starts to look silly in a military world where so much warfare is conducted on computer screens. On the other hand, the whole IT world starts to migrate toward a military environment.

Clarke mentions, at one point, the Applied Physics Laboratory of Johns Hopkins, as having NSA contracts, in the details of just how to make these complete separations to protect the power grid and military infrastructures. In late 2008, at least one technician there took a “hit” at her apartment in suburban Maryland, and if you put all the pieces together it sounds rather alarming. (The story by Aaron C. Davis is still on the Washington Post, Sept. 4, 2008, here.)

Clarke sketches some really chilling hypothetical scenarios of escalating attacks on US infrastructure, leading to months-long power outages in some parts of the country and many deaths, along with total economic collapse and the demise of individual liberty as we know it. Our “just in time” focus in maintaining our infrastructure could become our total undoing. He mentions several movies predicated on cyber attacks, including Oceans 11, not mentioning that a blackout in that movie is precipitated by a ground EMP (electromagnetic pulse) microwave device, nor that the power would not come back on immediately after such an event. In fact, that hardware possibility is one sinister scenario that he should have taken up.

Richard Clarke served under presidents Reagan, both Bush presidents, and under Bill Clinton he was National Coordinator for Security, Infrastructure and Counterterrorism.

From PBS: "Richard Clarke: The man who saw it coming."

Tuesday, April 13, 2010

Celebrating Ayn Rand at 105 (reviewing a "Reason" article in 2005)

Today, I rediscovered an article in the March 2005 issue of libertarian-leaning Reason, “Ayn Rand at 100”, by Cathy Young, link here.

She makes an interesting critique of the objectivist author’s philosophy, both as a moral paradigm and as it is implemented in her books, especially “The Fountainhead” (which I read in graduate school) and “Atlas Shrugged” (which I read while in the Army).

Young takes issue with the “totalism” of Rand’s philosophy. “there is nothing unreasonable and nothing anti-market or anti-individualist to the belief that individualistic and market-based values need something to complement them.”

She goes on to explain, “In its pure form, Rand's philosophy would work very well indeed if human beings were never helpless and dependent through no fault of their own. Thus, it's hardly surprising that so many people become infatuated with Objectivism as teenagers and "grow out of it" later, when concerns of family, children, and old age--their own and their families'--make that fantasy seem more and more impossible.”

She notes the relative paucity of families with children in her novels, and an attitude that productive work is always more important than family relationships, even having and rearing kids. If one follows through a process of “existential integrity”, one could see how Rand’s philosophy, applied literally enough, could lead into the land of the “isms” – especially fascism (or even, paradoxically, Maoism).

Indeed, one of the sections of “Atlas Shrugged” is called “Non Contradiction”, but Young notes that Rand could not tolerate detraction or challenge to the purity of her ideas. Yet, Young concludes, appropriately, “Rand's philosophy admitted no contradictions or paradoxes in reality; but reality is full of apparently irreconcilable truths. The truth of what Rand said about the heroic human spirit and individual self-determination does not negate the truth that human beings often find themselves at the mercy of circumstances beyond their control and dependent on others through no fault of theirs. The truth of the self-sufficient soul coexists with the truth of the vital importance of human connections.”

That reminds me of the discussion of ideas like “The Natural Family” (Carlson, reviewed here Sept. 2009), which tries to reconcile individualism and collectivism within the granularity of the family unit.

In practice, objectivism has appealed to the libertarian part of the LGBT community, because it does promote absolute moral equality of every individual at a global level (rather than of every “family”). There is something else, here. Objectivism emphasizes the right to define oneself and follow one’s end. As Joe Steffan wrote in “Honor Bound” (1992, review Oct. 2007), ““What can be better than allowing people to live their lives as they choose, to give them the freedom to take the limited time they have on earth and craft an existence that is uniquely theirs?” Paul Rosenfels considers self-definition as the hallmark of the “unbalanced personality” (objective masculine or subjective feminine) in the monographs following his “Homosexuality: the Psychology of the Creative Process” (1971, reviewed here April 2006). But self-definition can lead to the refusal to bond emotionally with anyone outside of the scope of one’s choice. Family, on the other hand, seems to exist in part just to get people to do that (under the control of parents) so that everyone’s life (regardless of ability) has value and is taken care of. This seems to constitute the paradox that Young is talking about.

Tuesday, April 06, 2010

Michael Lewis: "The Big Short: Inside the Doomsday Machine": How capitalism imploded

Author: Michael Lewis
Title: The Big Short: Inside the Doomsday Machine
Publication: New York, W. W. Norton, 2010, ISBN 978-0-393-07223-5, hardcover, 266 pages, ten chapters, prologue, epilogue,  Amazon link.

Well, the title does not invoke “get shorty”. Instead, it refers to the original difficulty in short-selling some kinds of bonds, like those tied to real estate, because of the complicated system of “tranches”, which rewards investors by where they got in in a fashion much like that of multi-level marketing.

But Wall Street found it’s way around all of this, partly because of the “herd mentality” forcing a certain kind of go-go mentality, and partly because of the insights of a very few people. So, as this prolific author explained in a recent spot on CBS “60 Minutes”, you had capitalism destroying itself, corrupted by a malignancy that was like the deathless component of cancer cells.

Lewis explains the buildup and Collapse of 2008 with great detail, showing his skills as an author delving into arcane subjects, like CDO’s and credit default swaps. His story revolves around a few characters, such as Steve Eisman, who noticed how Wall Street seemed to find the uncreditworthy (those who obviously did not have the ability to maintain renumerative employment indefinitely) as the next source of cannon fodder for financial leverage, Lippmann, but most of all Michael Burry, who figured out how to apply credit default swaps to the subprime market.

Burry had been shown in the CBS segment. Lewis tells his story in two parts, including his physical disability leading to his having only one working eye, his introversion and his turn from medicine to finance, his founding of Scion, and then later in the book his coming to understand his Asperger’s Syndrome, which actually facilitated is focus on detail and his ability to see through the herd mentality and see that the entire financial artifice based on subprime mortgages would collapse like a house of cards, making money for the few people who could figure out how to “short” it. Lewis displays a lot of Burry's writing, with its obsessive focus on details and compound sentences.  He also describes Burry's obsession with "fairness" and individual karma, a concern I share. In my own quarrels with my own father, I would want to "go to the root" of everything!

Lewis incidentally also covers the effect of the Internet on the perception of financial markets, especially in the early days, and not the experience of the Dot-com Bubble. Burry had become a financial blogger “in his spare time” while a physician in the 90s, when blogging was just getting started. He discusses how others found him and were drawn to his views, even resulting in at least one cease-and-desist letter.

Bloomberg interview with Michael Lewis: