10.17.2008

Mandatory Encryption - a silent tax.

Nevada this month enacted a law mandating
all businesses there to encrypt personally-identifiable customer data, including names and credit-card numbers, that are transmitted electronically.
Cool.

So - where are the keys?

PKIX notwithstanding - single sided authentication works in the web (HTTP) world and presumably would fulfill the requirement of encryption during transmission. We have it today - no cost involved.

But email encryption implies S/MIME or proprietary schemes, and a set of technology available to users and businesses alike. It means that those communicating with businesses are not only "registered" with that business, but have the appropriate software and security artifacts (keys, certs, what have you). Average per user cost? $50 a computer according to estimates.

The Wall Street Journal goes on to report
The new state data-security laws are stricter than past regulations, which only required businesses to notify people whose personal information they lost. The new laws establish a standard that can be used by plaintiffs in civil suits to argue that a business that lost data was negligent, said Miriam Wugmeister, an attorney with Morrison & Foerster LLP.
So - how well would have the new legislation protected the 47 million customers of the TJ Maxx conglomerate?

A better solution might be to require companies that transact business with retail customers to delete credit card information once a transaction is completed and approved by the credit card company. Leave essential CC authentication data in the hands of the authenticator (user).

This doesn't solve the other use cases, medical records or portions thereof, or business to business communications. But the later is of significantly reduced scope to the consumer case.

Healthcare organizations will be driven to more web based interactions with their patients, forgoing the quick Dr's note which the patient requested. Rather they will simply send a link saying "Sign in to discover what we can't tell you here."

Mandating "encryption" is like mandating the color of your car - it may look nice - but its probably not exactly what you wanted, especially when you have to pay for it.

10.16.2008

5 Years of 401(k) Contributions - "Poof!"

In assessing the personal damage from the current "World has Changed" events - I realized that the past 2 months have erased (yes - erased) 5 years of contribution to our 401(k). Granted - that's before taxes - but still ... its a shock. And a loss.

That said (and felt ), I bless my God - who is not made of wood or stone, or even precious metals or jewels, or indeed any made thing, rather He is, and He who was, and is, and is to come, and who has provided for me and my family faithfully - beyond anything I can ask or think. And I expect no less of Him in this time.

"Be anxious for nothing, but in everything by prayer and thanksgiving, let your requests be made known to God. And the peace of God, which surpasses all understanding, will keep your hearts and minds in Christ Jesus." Paul's letter to the Phillippian Church, Chapter 4, verses 6 & 7

So we are thankful that in Him we live, and breathe, and have our being. And our meals, and our house, car, dogs, school, music, church, friends, and work. And the living God Himself. We are excited to see the awesome things He does in our lives, our home, and in our community, in the midst these times that will try men's souls. And challenge ourselves.

~r

10.11.2008

Financial Crisis and Terrorism

This past week, on October 8th to be precise, British Prime minister Gordon Brown used the British version of the Patriot Act, the "2001 Anti-Terrorism and Anti-Crime Act" to freeze Icelandic assets in British banks. This legislation, enacted in the wake of the 9/11 attacks in the United States, was proposed to protect the British Public from terrorism and crime by granting to the state special powers. These powers include the seizure of assets - supposedly to mitigate a terrorist's or criminal's means of practicing their trades. 

The backdrop of Gordon Brown's action is the historic financial collapse Iceland has now suffered. In its wake, the Icelandic state has made financial guarantees which simple arithmetic suggests are far from the realm of possibility. But this is only backdrop. The key feature of the British action against Icelandic assets is the use of legislation that in no way was intended to be so used.

Granting new powers to the state in times of fear and crisis almost always have unintended and negative side effects. Those who have contested both the British anti-terrorism and U.S. "Patriot" acts and the extended powers they grant have been accused of un-patriotic or even disloyal sentiments. But Gordon Brown's unprecedented actions underscore the threat where powers are granted under the guise of "safety and security," and consequently used for the convenience of the state. While the British government will no doubt defend its actions with explanations of the criticality of the threat to British assets - this will sidestep the fundamental issue.  The use of anti-terrorist law for purposes decidedly unrelated to terrorism is a different kind of threat - the latter perhaps equal to the former.

If the lines between controlling terrorists and friendly economic partners can be eradicated by no less than the Prime Minister of one of the leading democratic western powers in a time of crisis - what can we expect from governments with histories less democratic in nature?

Key to the principle of limited government is the recognition that government can't do/fix/be everything that is wrong in our lives. And yet, increasingly it appears, we look to our government as the solution, even if of last resort - despite the erosion of liberty that inevitably results. Whether the "Patriot Act," or new legislation intended stem the flood of financial failure - we might ask why we think rapid and sweeping legislative action in the absence of broad, open, and deliberate debate will achieve what prior legislation has failed to do?  I'd like to think we'd resist the temptation to accept at face value "solutions" proffered  with the attendant risk that it may cost us more than they are intended to save. 

We are faced with an unprecedented financial crisis, and one of global proportions. Its repercussions will take many months, if not years, to be realized. The impact on our day-to-day lives will be significant. We will witness the emergence of geo-political alignments that were previously unthinkable. And yet, live our lives we will, and by God's grace, well.

Of all tyrannies a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. -C.S. Lewis

~r

9.26.2008

Obama's Foreign Policy Stance (C) 2008 Strategic Forecasting. Reprinted by permission.

Stratfor
---------------------------



OBAMA'S FOREIGN POLICY STANCE (OPEN ACCESS)

Editor's Note: This is part two of a four-part report by Stratfor founder and Chief Intelligence Officer George Friedman on the U.S. presidential debate on foreign policy, to be held Sept. 26. Stratfor is a private, nonpartisan intelligence service with no preference for one candidate over the other. We are interested in analyzing and forecasting the geopolitical impact of the election and, with this series, seek to answer two questions: What is the geopolitical landscape that will confront the next president, and what foreign policy proposals would a President McCain or a President Obama bring to bear? For media interviews, e-mail pr@stratfor.com or call 512-744-4309.

By George Friedman

Barack Obama is the Democratic candidate for president. His advisers in foreign policy are generally Democrats. Together they carry with them an institutional memory of the Democratic Party's approach to foreign policy, and are an expression of the complexity and divisions of that approach. Like the their Republican counterparts, in many ways they are going to be severely constrained as to what they can do both by the nature of the global landscape and American resources. But to some extent, they will also be constrained and defined by the tradition they come from. Understanding that tradition and Obama's place is useful in understanding what an Obama presidency would look like in foreign affairs.

The most striking thing about the Democratic tradition is that it presided over the beginnings of the three great conflicts that defined the 20th century: Woodrow Wilson and World War I, Franklin Delano Roosevelt and World War II, and Harry S. Truman and the Cold War. (At this level of analysis, we will treat the episodes of the Cold War such as Korea, Vietnam or Grenada as simply subsets of one conflict.) This is most emphatically not to say that had Republicans won the presidency in 1916, 1940 or 1948, U.S. involvement in those wars could have been avoided.

Patterns in Democratic Foreign Policy

But it does give us a framework for considering persistent patterns of Democratic foreign policy. When we look at the conflicts, four things become apparent.

First, in all three conflicts, Democrats postponed the initiation of direct combat as long as possible. In only one, World War I, did Wilson decide to join the war without prior direct attack. Roosevelt maneuvered near war but did not enter the war until after Pearl Harbor. Truman also maneuvered near war but did not get into direct combat until after the North Korean invasion of South Korea. Indeed, even Wilson chose to go to war to protect free passage on the Atlantic. More important, he sought to prevent Germany from defeating the Russians and the Anglo-French alliance and to stop the subsequent German domination of Europe, which appeared possible. In other words, the Democratic approach to war was reactive. All three presidents reacted to events on the surface, while trying to shape them underneath the surface.

Second, all three wars were built around coalitions. The foundation of the three wars was that other nations were at risk and that the United States used a predisposition to resist (Germany in the first two wars, the Soviet Union in the last) as a framework for involvement. The United States under Democrats did not involve itself in war unilaterally. At the same time, the United States under Democrats made certain that the major burdens were shared by allies. Millions died in World War I, but the United States suffered 100,000 dead. In World War II, the United States suffered 500,000 dead in a war where perhaps 50 million soldiers and civilians died. In the Cold War, U.S. losses in direct combat were less than 100,000 while the losses to Chinese, Vietnamese, Koreans and others towered over that toll. The allies had a complex appreciation of the United States. On the one hand, they were grateful for the U.S. presence. On the other hand, they resented the disproportionate amoun
ts of blood and effort shed. Some of the roots of anti-Americanism are to be found in this strategy.

Third, each of these wars ended with a Democratic president attempting to create a system of international institutions designed to limit the recurrence of war without directly transferring sovereignty to those institutions. Wilson championed the League of Nations. Roosevelt the United Nations. Bill Clinton, who presided over most of the post-Cold War world, constantly sought international institutions to validate U.S. actions. Thus, when the United Nations refused to sanction the Kosovo War, he designated NATO as an alternative international organization with the right to approve conflict. Indeed, Clinton championed a range of multilateral organizations during the 1990s, including everything from the International Monetary Fund, the World Bank, the General Agreement on Tariffs and Trade, and later the World Trade Organization. All these presidents were deeply committed to multinational organizations to define permissible and impermissible actions.

And fourth, there is a focus on Europe in the Democratic view of the world. Roosevelt regarded Germany as the primary threat instead of the Pacific theater in World War II. And in spite of two land wars in Asia during the Cold War, the centerpiece of strategy remained NATO and Europe. The specific details have evolved over the last century, but the Democratic Party -- and particularly the Democratic foreign policy establishment -- historically has viewed Europe as a permanent interest and partner for the United States.

Thus, the main thrust of the Democratic tradition is deeply steeped in fighting wars, but approaches this task with four things in mind:

Wars should not begin until the last possible moment and ideally should be initiated by the enemy.
Wars must be fought in a coalition with much of the burden borne by partners.
The outcome of wars should be an institutional legal framework to manage the peace, with the United States being the most influential force within this multilateral framework.
Any such framework must be built on a trans-Atlantic relationship.

Democratic Party Fractures

That is one strand of Democratic foreign policy. A second strand emerged in the context of the Vietnam War. That war began under the Kennedy administration and was intensified by Lyndon Baines Johnson, particularly after 1964. The war did not go as expected. As the war progressed, the Democratic Party began to fragment. There were three factions involved in this.

The first faction consisted of foreign policy professionals and politicians who were involved in the early stages of war planning but turned against the war after 1967 when it clearly diverged from plans. The leading political figure of this faction was Robert F. Kennedy, who initially supported the war but eventually turned against it.

The second faction was more definitive. It consisted of people on the left wing of the Democratic Party -- and many who went far to the left of the Democrats. This latter group not only turned against the war, it developed a theory of the U.S. role in the war that as a mass movement was unprecedented in the century. The view (it can only be sketched here) maintained that the United States was an inherently imperialist power. Rather than the benign image that Wilson, Roosevelt and Truman had of their actions, this faction reinterpreted American history going back into the 19th century as violent, racist and imperialist (in the most extreme faction's view). Just as the United States annihilated the Native Americans, the United States was now annihilating the Vietnamese.

A third, more nuanced, faction argued that rather than an attempt to contain Soviet aggression, the Cold War was actually initiated by the United States out of irrational fear of the Soviets and out of imperialist ambitions. They saw the bombing of Hiroshima as a bid to intimidate the Soviet Union rather than an effort to end World War II, and the creation of NATO as having triggered the Cold War.

These three factions thus broke down into Democratic politicians such as RFK and George McGovern (who won the presidential nomination in 1972), radicals in the street who were not really Democrats, and revisionist scholars who for the most part were on the party's left wing.

Ultimately, the Democratic Party split into two camps. Hubert Humphrey led the first along with Henry Jackson, who rejected the left's interpretation of the U.S. role in Vietnam and claimed to speak for the Wilson-FDR-Truman strand in Democratic politics. McGovern led the second. His camp largely comprised the party's left wing, which did not necessarily go as far as the most extreme critics of that tradition but was extremely suspicious of anti-communist ideology, the military and intelligence communities, and increased defense spending. The two camps conducted extended political warfare throughout the 1970s.

The presidency of Jimmy Carter symbolized the tensions. He came to power wanting to move beyond Vietnam, slashing and changing the CIA, controlling defense spending and warning the country of "an excessive fear of Communism." But following the fall of the Shah of Iran and the Soviet invasion of Afghanistan, he allowed Zbigniew Brzezinski, his national security adviser and now an adviser to Obama, to launch a guerrilla war against the Soviets using Islamist insurgents from across the Muslim world in Afghanistan. Carter moved from concern with anti-Communism to coalition warfare against the Soviets by working with Saudi Arabia, Pakistan and Afghan resistance fighters.

Carter was dealing with the realities of U.S. geopolitics, but the tensions within the Democratic tradition shaped his responses. During the Clinton administration, these internal tensions subsided to a great degree. In large part this was because there was no major war, and the military action that did occur -- as in Haiti and Kosovo -- was framed as humanitarian actions rather than as the pursuit of national power. That soothed the anti-war Democrats to a great deal, since their perspective was less pacifistic than suspicious of using war to enhance national power.

The Democrats Since 9/11

Since the Democrats have not held the presidency during the last eight years, judging how they might have responded to events is speculative. Statements made while in opposition are not necessarily predictive of what an administration might do. Nevertheless, Obama's foreign policy outlook was shaped by the last eight years of Democrats struggling with the U.S.-jihadist war.

The Democrats responded to events of the last eight years as they traditionally do when the United States is attacked directly: The party's anti-war faction contracted and the old Democratic tradition reasserted itself. This was particularly true of the decision to go to war in Afghanistan. Obviously, the war was a response to an attack and, given the mood of the country after 9/11, was an unassailable decision. But it had another set of characteristics that made it attractive to the Democrats. The military action in Afghanistan was taking place in the context of broad international support and within a coalition forming at all levels, from on the ground in Afghanistan to NATO and the United Nations. Second, U.S. motives did not appear to involve national self-interest, like increasing power or getting oil. It was not a war for national advantage, but a war of national self-defense.

The Democrats were much less comfortable with the Iraq war than they were with Afghanistan. The old splits reappeared, with many Democrats voting for the invasion and others against. There were complex and mixed reasons why each Democrat voted the way they did -- some strategic, some purely political, some moral. Under the pressure of voting on the war, the historically fragile Democratic consensus broke apart, not so much in conflict as in disarray. One of the most important reasons for this was the sense of isolation from major European powers -- particularly the French and Germans, whom the Democrats regarded as fundamental elements of any coalition. Without those countries, the Democrats regarded the United States as diplomatically isolated.

The intraparty conflict came later. As the war went badly, the anti-war movement in the party re-energized itself. They were joined later by many who had formerly voted for the war but were upset by the human and material cost and by the apparent isolation of the United States and so on. Both factions of the Democratic Party had reasons to oppose the Iraq war even while they supported the Afghan war.

Understanding Obama's Foreign Policy

It is in light of this distinction that we can begin to understand Obama's foreign policy. On Aug. 1, Obama said the following: "It is time to turn the page. When I am President, we will wage the war that has to be won, with a comprehensive strategy with five elements: getting out of Iraq and on to the right battlefield in Afghanistan and Pakistan; developing the capabilities and partnerships we need to take out the terrorists and the world's most deadly weapons; engaging the world to dry up support for terror and extremism; restoring our values; and securing a more resilient homeland."

Obama's view of the Iraq war is that it should not have been fought in the first place, and that the current success in the war does not justify it or its cost. In this part, he speaks to the anti-war tradition in the party. He adds that Afghanistan and Pakistan are the correct battlefields, since this is where the attack emanated from. It should be noted that on several occasions Obama has pointed to Pakistan as part of the Afghan problem, and has indicated a willingness to intervene there if needed while demanding Pakistani cooperation. Moreover, Obama emphasizes the need for partnerships -- for example, coalition partners -- rather than unilateral action in Afghanistan and globally.

Responding to attack rather than pre-emptive attack, coalition warfare and multinational postwar solutions are central to Obama's policy in the Islamic world. He therefore straddles the divide within the Democratic Party. He opposes the war in Iraq as pre-emptive, unilateral and outside the bounds of international organizations while endorsing the Afghan war and promising to expand it.

Obama's problem would be applying these principles to the emerging landscape. He shaped his foreign policy preferences when the essential choices remained within the Islamic world -- between dealing with Iraq and Afghanistan simultaneously versus focusing on Afghanistan primarily. After the Russian invasion of Georgia, Obama would face a more complex set of choices between the Islamic world and dealing with the Russian challenge.

Obama's position on Georgia tracked with traditional Democratic approaches:

"Georgia's economic recovery is an urgent strategic priority that demands the focused attention of the United States and our allies. That is why Senator Biden and I have called for $1 billion in reconstruction assistance to help the people of Georgia in this time of great trial. I also welcome NATO's decision to establish a NATO-Georgia Commission and applaud the new French and German initiatives to continue work on these issues within the EU. The Bush administration should call for a U.S.-EU-Georgia summit in September that focuses on strategies for preserving Georgia's territorial integrity and advancing its economic recovery."

Obama avoided militaristic rhetoric and focused on multinational approaches to dealing with the problem, particularly via NATO and the European Union. In this and in Afghanistan, he has returned to a Democratic fundamental: the centrality of the U.S.-European relationship. In this sense, it is not accidental that he took a preconvention trip to Europe. It was both natural and a signal to the Democratic foreign policy establishment that he understands the pivotal position of Europe.

This view on multilateralism and NATO is summed up in a critical statement by Obama in a position paper:

"Today it's become fashionable to disparage the United Nations, the World Bank, and other international organizations. In fact, reform of these bodies is urgently needed if they are to keep pace with the fast-moving threats we face. Such real reform will not come, however, by dismissing the value of these institutions, or by bullying other countries to ratify changes we have drafted in isolation. Real reform will come because we convince others that they too have a stake in change -- that such reforms will make their world, and not just ours, more secure.

"Our alliances also require constant management and revision if they are to remain effective and relevant. For example, over the last 15 years, NATO has made tremendous strides in transforming from a Cold War security structure to a dynamic partnership for peace.

"Today, NATO's challenge in Afghanistan has become a test case, in the words of Dick Lugar, of whether the alliance can 'overcome the growing discrepancy between NATO's expanding missions and its lagging capabilities.'"

Obama's European Problem

The last paragraph represents the key challenge to Obama's foreign policy, and where his first challenge would come from. Obama wants a coalition with Europe and wants Europe to strengthen itself. But Europe is deeply divided, and averse to increasing its defense spending or substantially increasing its military participation in coalition warfare. Obama's multilateralism and Europeanism will quickly encounter the realities of Europe.

This would immediately affect his jihadist policy. At this point, Obama's plan for a 16-month drawdown from Iraq is quite moderate, and the idea of focusing on Afghanistan and Pakistan is a continuation of Bush administration policy. But his challenge would be to increase NATO involvement. There is neither the will nor the capability to substantially increase Europe's NATO participation in Afghanistan.

This problem would be even more difficult in dealing with Russia. Europe has no objection in principle to the Afghan war; it merely lacks the resources to substantially increase its presence there. But in the case of Russia, there is no European consensus. The Germans are dependent on the Russians for energy and do not want to risk that relationship; the French are more vocal but lack military capability, though they have made efforts to increase their commitment to Afghanistan. Obama says he wants to rely on multilateral agencies to address the Russian situation. That is possible diplomatically, but if the Russians press the issue further, as we expect, a stronger response will be needed. NATO will be unlikely to provide that response.

Obama would therefore face the problem of shifting the focus to Afghanistan and the added problem of balancing between an Islamic focus and a Russian focus. This will be a general problem of U.S. diplomacy. But Obama as a Democrat would have a more complex problem. Averse to unilateral actions and focused on Europe, Obama would face his first crisis in dealing with the limited support Europe can provide.

That will pose serious problems in both Afghanistan and Russia, which Obama would have to deal with. There is a hint in his thoughts on this when he says, "And as we strengthen NATO, we should also seek to build new alliances and relationships in other regions important to our interests in the 21st century." The test would be whether these new coalitions will differ from, and be more effective than, the coalition of the willing.

Obama would face similar issues in dealing with the Iranians. His approach is to create a coalition to confront the Iranians and force them to abandon their nuclear program. He has been clear that he opposes that program, although less clear on other aspects of Iranian foreign policy. But again, his solution is to use a coalition to control Iran. That coalition disintegrated to a large extent after Russia and China both indicated that they had no interest in sanctions.

But the coalition Obama plans to rely on will have to be dramatically revived by unknown means, or an alternative coalition must be created, or the United States will have to deal with Afghanistan and Pakistan unilaterally. This reality places a tremendous strain on the core principles of Democratic foreign policy. To reconcile the tensions, he would have to rapidly come to an understanding with the Europeans in NATO on expanding their military forces. Since reaching out to the Europeans would be among his first steps, his first test would come early.

The Europeans would probably balk, and, if not, they would demand that the United States expand its defense spending as well. Obama has shown no inclination toward doing this. In October 2007, he said the following on defense: "I will cut tens of billions of dollars in wasteful spending. I will cut investments in unproven missile defense systems. I will not weaponize space. I will slow our development of future combat systems, and I will institute an independent defense priorities board to ensure that the quadrennial defense review is not used to justify unnecessary spending."

Russia, Afghanistan and Defense Spending

In this, Obama is reaching toward the anti-war faction in his party, which regards military expenditures with distrust. He focused on advanced war-fighting systems, but did not propose cutting spending on counterinsurgency. But the dilemma is that in dealing with both insurgency and the Russians, Obama would come under pressure to do what he doesn't want to do -- namely, increase U.S. defense spending on advanced systems.

Obama has been portrayed as radical. That is far from the case. He is well within a century-long tradition of the Democratic Party, with an element of loyalty to the anti-war faction. But that element is an undertone to his policy, not its core. The core of his policy would be coalition building and a focus on European allies, as well as the use of multilateral institutions and the avoidance of pre-emptive war. There is nothing radical or even new in these principles. His discomfort with military spending is the only thing that might link him to the party's left wing.

The problem he would face is the shifting international landscape, which would make it difficult to implement some of his policies. First, the tremendous diversity of international challenges would make holding the defense budget in check difficult. Second, and more important, is the difficulty of coalition building and multilateral action with the Europeans. Obama thus lacks both the force and the coalition to carry out his missions. He therefore would have no choice but to deal with the Russians while confronting the Afghan/Pakistani question even if he withdrew more quickly than he says he would from Iraq.

The make-or-break moment for Obama will come early, when he confronts the Europeans. If he can persuade them to take concerted action, including increased defense spending, then much of his foreign policy rapidly falls into place, even if it is at the price of increasing U.S. defense spending. If the Europeans cannot come together (or be brought together) decisively, however, then he will have to improvise.

Obama would be the first Democrat in this century to take office inheriting a major war. Inheriting an ongoing war is perhaps the most difficult thing for a president to deal with. Its realities are already fixed and the penalties for defeat or compromise already defined. The war in Afghanistan has already been defined by U.S. President George W. Bush's approach. Rewriting it will be enormously difficult, particularly when rewriting it depends on ending unilateralism and moving toward full coalition warfare when coalition partners are wary.

Obama's problems are compounded by the fact that he does not only have to deal with an inherited war, but also a resurgent Russia. And he wants to depend on the same coalition for both. That will be enormously challenging for him, testing his diplomatic skills as well as geopolitical realities. As with all presidents, what he plans to do and what he would do are two different things. But it seems to us that his presidency would be defined by whether he can change the course of U.S.-European relations not by accepting European terms but by persuading them to accommodate U.S. interests.

An Obama presidency would not turn on this. There is no evidence that he lacks the ability to shift with reality -- that he lacks Machiavellian virtue. But it still will be the first and critical test, one handed to him by the complex tensions of Democratic traditions and by a war he did not start.

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McCain's Foreign Policy Stance. (C) 2008 Strategic Forecasting. Reprinted by permission.

Stratfor
---------------------------

MCCAIN'S FOREIGN POLICY STANCE (OPEN ACCESS)

Editor's Note: This is part three of a four-part report by Stratfor founder and Chief Intelligence Officer George Friedman on the U.S. presidential debate on foreign policy, to be held Sept. 26. Stratfor is a private, nonpartisan intelligence service with no preference for one candidate over the other. We are interested in analyzing and forecasting the geopolitical impact of the election and, with this series, seek to answer two questions: What is the geopolitical landscape that will confront the next president, and what foreign policy proposals would a President McCain or a President Obama bring to bear? For media interviews, e-mail pr@stratfor.com or call 512-744-4309.

By George Friedman

John McCain is the Republican candidate for president. This means he is embedded in the Republican tradition. That tradition has two roots, which are somewhat at odds with each other: One root is found in Theodore Roosevelt's variety of internationalism, and the other in Henry Cabot Lodge's opposition to the League of Nations. Those roots still exist in the Republican Party. But accommodations to the reality the Democrats created after World War II -- and that Eisenhower, Nixon and, to some extent, Reagan followed -- have overlain them. In many ways, the Republican tradition of foreign policy is therefore more complex than the Democratic tradition.

Roosevelt and the United States as Great Power

More than any other person, Roosevelt introduced the United States to the idea that it had become a great power. During the Spanish-American War, in which he had enthusiastically participated, the United States took control of the remnants of the Spanish empire. During his presidency a few years later, Roosevelt authorized the first global tour by a U.S. fleet, which was designed to announce the arrival of the United States with authority. The fleet was both impressive and surprising to many great powers, which at the time tended to dismiss the United States.

For Roosevelt, having the United States take its place among the great powers served two purposes. First, it protected American maritime interests. The United States was a major trading power, so control of the seas was a practical imperative. But there was also an element of deep pride -- to the point of ideology. Roosevelt saw the emergence of the United States as a validation of the American experiment with democracy and a testament to America as an exceptional country and regime. Realistic protection of national interest joined forces with an ideology of entitlement. The Panama Canal, which was begun in Roosevelt's administration, served both interests.

The Panama Canal highlights the fact that for Roosevelt -- heavily influenced by theories of sea power -- the Pacific Ocean was at least as important as the Atlantic. The most important imperial U.S. holding at the time was the Pacific territory of the Philippines, which U.S. policy focused on protecting. Also reflecting Roosevelt's interest in the Pacific, he brokered the peace treaty ending the Russo-Japanese War in 1905 and increased U.S. interests in China. (Overall, the Democratic Party focused on Europe, while the Republican Party showed a greater interest in Asia.)

The second strand of Republicanism emerged after World War I, when Lodge, a Republican senator, defeated President Woodrow Wilson's plan for U.S. entry into the League of Nations. Lodge had supported the Spanish-American War and U.S. involvement in World War I, but he opposed league membership because he felt it would compel the United States to undertake obligations it should not commit to. Moreover, he had a deep distrust of the Europeans, whom he believed would drag the United States into another war.

The foundations of Republican foreign policy early in the 20th century therefore consisted of three elements:

A willingness to engage in foreign policy and foreign wars when this serves U.S. interests.
An unwillingness to enter into multilateral organizations or alliances, as this would deprive the United States of the right to act unilaterally and would commit it to fight on behalf of regimes it might have no interest in defending.
A deep suspicion of the diplomacy of European states grounded on a sense that they were too duplicitous and unstable to trust and that treaties with them would result in burdens on -- but not benefits for -- the United States.


Isolationism

This gave rise to what has been called the "isolationist" strand in the Republican Party, although the term "isolation" is not by itself proper. The isolationists opposed involvement in the diplomacy and politics of Europe. In their view, the U.S. intervention in World War I had achieved little. The Europeans needed to achieve some stable outcome on their own, and the United States did not have  the power to impose --  or an interest in -- that outcome. Underlying this was a belief that, as hostile as the Germans and Soviets were, the French and British were not decidedly better.

Opposition to involvement in a European war did not translate to indifference to the outcome in the Pacific. The isolationists regarded Japan with deep suspicion, and saw China as a potential ally and counterweight to Japan. They were prepared to support the Chinese and even have some military force present, just as they were prepared to garrison the Philippines.

There was a consistent position here. First, adherents of this strand believed that waging war on the mainland of Eurasia, either in China or in Europe, was beyond U.S. means and was dangerous. Second, they believed heavily in sea power, and that control of the sea would protect the United States against aggression and protect U.S. maritime trade. This made them suspicious of other maritime powers, including Japan and the United Kingdom. Third, and last, the isolationists deeply opposed alliances that committed the United States to any involvement in war. They felt that the decision to make war should depend on time and place -- not a general commitment. Therefore, the broader any proposed alliance involving the United States, the more vigorously the isolationists opposed it.

Republican foreign policy -- a product of the realist and isolationist strands -- thus rejected the idea that the United States had a moral responsibility to police the world, while accepting the idea that the United States was morally exceptional. It was prepared to engage in global politics but only when it affected the direct interests of the United States. It regarded the primary interest of the United States to be protecting itself from the wars raging in the world and saw naval supremacy as the means toward that end. It regarded alliances as a potential trap and, in particular, saw the Europeans as dangerous and potentially irresponsible after World War I -- and wanted to protect the United States from the consequences of European conflict. In foreign policy, Republicans were realists first, moralists a distant second.

Following the Japanese attack on Pearl Harbor and the German declaration of war on the United States in 1941, the realist strand in Republican foreign policy appeared to be replaced with a new strand. World War II, and Franklin D. Roosevelt's approach to waging it, created a new reality. Republican isolationists were discredited politically; their realism was seen as a failure to grasp global realities. Moreover, the war was fought within an alliance structure. Parts of that alliance structure were retained, and supplemented grandly, after the war. The United States joined the United Nations, and the means chosen to contain the Soviet Union was an alliance system, with NATO -- and hence the Europeans -- as the centerpiece.

Moralism vs. Realism

The Republicans were torn between two wings after the war. On the one hand, there was Robert Taft, who spoke for the prewar isolationist foreign policy. On the other hand, there was Eisenhower, who had commanded the European coalition and had an utterly different view of alliances and of the Europeans. In the struggle between Taft and Eisenhower for the nomination in 1952, Eisenhower won decisively. The Republican Party reoriented itself fundamentally, or so it appeared.

The Republicans' move toward alliances and precommitments was coupled with a shift in moral emphasis. From the unwillingness to take moral responsibility for the world, the Republicans moved toward a moral opposition to the Soviet Union and communism. Both Republicans and Democrats objected morally to the communists. But for the Republicans, moral revulsion justified a sea change in their core foreign policy; anti-communism became a passion that justified changing lesser principles.

Yet the old Republican realism wasn't quite dead. At root, Eisenhower was never a moralist. His anti-communism represented a strategic fear of the Soviet Union more than a moral crusade. Indeed, the Republican right condemned him for this. As his presidency progressed, the old realism re-emerged, now in the context of alliance systems.

But there was a key difference in Eisenhower's approach to alliances and multilateral institutions: He supported them when they enabled the United States to achieve its strategic ends; he did not support them as ends in themselves. Whereas Eleanor Roosevelt, for example, saw the United Nations as a way to avoid war, Eisenhower saw it as a forum for pursuing American interests. Eisenhower didn't doubt the idea of American exceptionalism, but his obsession was with the national interest. Thus, when the right wanted him to be more aggressive and liberate Eastern Europe, he was content to contain the Soviets and leave the Eastern Europeans to deal with their own problems.

The realist version of Republican foreign policy showed itself even more clearly in the Nixon presidency and in Henry Kissinger's execution of it. The single act that defined this was Nixon's decision to visit China, meet Mao Zedong, and form what was, in effect, an alliance with Communist China against the Soviet Union. The Vietnam War weakened the United States and strengthened the Soviet Union; China and the United States shared a common interest in containing the Soviet Union. An alliance was in the interests of both Beijing and Washington, and ideology was irrelevant. (The alliance with China also revived the old Republican interest in Asia.)

With that single action, Nixon and Kissinger reaffirmed the principle that U.S. foreign policy was not about moralism -- of keeping the peace or fighting communism -- but about pursuing the national interest. Alliances might be necessary, but they did not need to have a moral component.

While the Democrats were torn between the traditionalists and the anti-war movement, the Republicans became divided between realists who traced their tradition back to the beginning of the century and moralists whose passionate anti-communism began in earnest after World War II. Balancing the idea of foreign policy as a moral mission fighting evil and the idea of foreign policy as the pursuit of national interest and security defined the fault line within the Republican Party.

Reagan and the Post-Cold War World

Ronald Reagan tried to straddle this fault line. Very much rooted in the moral tradition of his party, he defined the Soviet Union as an "evil empire." At the same time, he recognized that moralism was insufficient. Foreign policy ends had to be coupled with extremely flexible means. Thus, Reagan maintained the relationship with China. He also played a complex game of negotiation, manipulation and intimidation with the Soviets. To fund the Contras -- guerrillas fighting the Marxist government of Nicaragua -- his administration was prepared to sell weapons to Iran, which at that time was fighting a war with Iraq. In other words, Reagan embedded the anti-communism of the Republicans of the 1950s with the realism of Nixon and Kissinger. To this, he added a hearty disdain for Europe, where in return he was reviled as a cowboy. The antecedents of this distrust of the Europeans, particularly the French, went back to the World War I era.

The collapse of communism left the Republicans with a dilemma. The moral mission was gone; realism was all that was left. This was the dilemma that George H. W. Bush had to deal with. Bush was a realist to the core, yet he seemed incapable of articulating that as a principle. Instead, he announced the "New World Order," which really was a call for multilateral institutions and the transformation of the anti-communist alliance structure into an all-inclusive family of democratic nations. In short, at the close of the Cold War, the first President Bush adopted the essence of Democratic foreign policy. This helps explain Ross Perot's run for the presidency and Bush's loss to Bill Clinton. Perot took away the faction of the Republican Party that retained the traditional aversion to multilateralism -- in the form of NAFTA, for example.

It was never clear what form George W. Bush's foreign policy would have taken without 9/11. After Sept. 11, 2001, Bush tried to re-create Reagan's foreign policy. Rather than defining the war as a battle against jihadists, he defined it as a battle against terrorism, as if this were the ideological equivalent of communism. He defined an "Axis of Evil" redolent of Reagan's "Evil Empire." Within the confines of this moral mission, he attempted to execute a systematic war designed to combat terrorism.

It is important to bear in mind the complexity of George W. Bush's foreign policy compared to the simplicity of its stated moral mission, which first was defined as fighting terrorism and later as bringing democracy to the Middle East. In the war in Afghanistan, Bush initially sought and received Russian and Iranian assistance. In Iraq, he ultimately reached an agreement with the Sunni insurgents whom he had formerly fought. In between was a complex array of covert operations, alliances and betrayals, and wars large and small throughout the region. Bush faced a far more complex situation than Reagan did -- a situation that, in many instances, lacked solutions by available means.

McCain: Moralist or Realist?

Which brings us to McCain and the most important questions he would have to answer in his presidency: To what extent would he adopt an overriding moral mission, and how would he apply available resources to that mission? Would McCain tend toward the Nixon-Kissinger model of a realist Republican president, or to the more moralist Reagan-Bush model?

Though the answers to these questions will not emerge during campaign season, a President McCain would have to answer them almost immediately. For example, in dealing with the Afghan situation, one of the options will be a deal with the Taliban paralleling the U.S. deal with the Iraqi Sunni insurgents. Would McCain be prepared to take this step in the Reagan-Bush tradition, or would he reject it on rigid moral principles? And would McCain be prepared to recognize a sphere of influence for Russia in the former Soviet Union, or would he reject the concept as violating moral principles of national sovereignty and rights?

McCain has said the United States should maintain a presence in Iraq for as long as necessary to stabilize the country, although he clearly believes that, with the situation stabilizing, the drawdown of troops can be more rapid. In discussing Afghanistan, it is clear that he sees the need for more troops. But his real focus is on Pakistan, about which he said in July: "We must strengthen local tribes in the border areas who are willing to fight the foreign terrorists there. We must also empower the new civilian government of Pakistan to defeat radicalism with greater support for development, health, and education."

McCain understands that the key to dealing with Afghanistan lies in Pakistan, and he implies that solving the problem in Pakistan requires forming a closer relationship with tribes in the Afghan-Pakistani border region. What McCain has not said -- and what he cannot say for political and strategic reasons -- is how far he would go in making agreements with the Pashtun tribes in the area that have been close collaborators with al Qaeda.

A similar question comes up in the context of Russia and its relations with other parts of the former Soviet Union. Shortly after the Russian invasion of Georgia, McCain said, "The implications of Russian actions go beyond their threat to the territorial integrity and independence of a democratic Georgia. Russia is using violence against Georgia, in part, to intimidate other neighbors such as Ukraine for choosing to associate with the West and adhering to Western political and economic values. As such, the fate of Georgia should be of grave concern to Americans and all people who welcomed the end of a divided Europe, and the independence of former Soviet republics. The international response to this crisis will determine how Russia manages its relationships with other neighbors."

McCain has presented Russia's actions in moral terms. He also has said international diplomatic action must be taken to deal with Russia, and he has supported NATO expansion. So he has combined a moral approach with a coalition approach built around the Europeans. In short, his public statements draw from moral and multilateral sources. What is not clear is the degree to which he will adhere to realist principles in pursuing these ends. He clearly will not be a Nixon.

Whether he will be like Reagan, or more like George W. Bush -- that is, Reagan without Reagan's craft -- or a rigid moralist indifferent to consequences remains in question.

It is difficult to believe McCain would adopt the third option. He takes a strong moral stance, but is capable of calibrating his tactics. This is particularly clear when you consider his position on working with the Europeans. In 1999 -- quite a ways back in foreign policy terms -- McCain said of NATO, "As we approach the 50th anniversary of NATO, the Atlantic Alliance is in pretty bad shape. Our allies are spending far too little on their own defense to maintain the alliance as an effective military force."

Since then, Europe's defense spending has not soared, to say the least. McCain's August 2008 statement that "NATO's North Atlantic Council should convene in emergency session to demand a cease-fire and begin discussions on both the deployment of an international peacekeeping force to South Ossetia" must be viewed in this context.

In this statement, McCain called for a NATO peacekeeping force to South Ossetia. A decade before, he was decrying NATO's lack of military preparedness, which few dispute is still an extremely significant issue.

But remember that presidential campaigns are not where forthright strategic thinking should be expected, and moral goals must be subordinate to the realities of power. While McCain would need to define the mix of moralism and realism in his foreign policy, he made his evaluation of NATO's weakness clear in 1999. Insofar as he believes this evaluation still holds true, he would not have to face the first issue that Barack Obama likely would -- namely, what to do when the Europeans fail to cooperate. McCain already believes that they will not (or cannot).

Instead, McCain would have to answer another question, which ultimately is the same as Obama's question:  Where will the resources come from to keep forces in Iraq, manage the war in Afghanistan, involve Pakistanis in that conflict and contain Russia? In some sense, McCain has created a tougher political position for himself by casting all these issues in a moral light. But, in the Reagan tradition, a moral position has value only if it can be pursued, and pursuing those actions requires both moral commitment and Machiavellian virtue.

Therefore, McCain will be pulled in two directions. First, like Obama, he would not be able to pursue his ends without a substantial budget increase or abandoning one or more theaters of operation. The rubber band just won't stretch without reinforcements. Second, while those reinforcements are mustered -- or in lieu of reinforcements -- he will have to execute a complex series of tactical operations. This will involve holding the line in Iraq, creating a political framework for settlement in Afghanistan and scraping enough forces together to provide some pause to the Russians as they pressure their periphery.

McCain's foreign policy -- like Obama's -- would devolve into complex tactics, where the devil is in the details, and the details will require constant attention.

The Global Landscape and the Next President

Ultimately, it is the global landscape that determines a president's foreign policy choices, and the traditions presidents come from can guide them only so far. Whoever becomes president in January 2009 will face the same landscape and limited choices. The winner will require substantial virtue, and neither candidate should be judged on what he says now, since no one can anticipate either the details the winner will confront or the surprises the world will throw at him.

We can describe the world. We can seek to divine the candidates' intentions by looking at their political traditions. We can understand the intellectual and moral tensions they face. But in the end, we know no more about the virtue of these two men than anyone else. We do know that, given the current limits of U.S. power and the breadth of U.S. commitments, it will take a very clever and devious president to pursue the national interest, however that is defined.

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Copyright 2008 Stratfor.

9.03.2008

Terrorism Weekly : The Second Cold War and Corporate Security

(republished by permission of Stratfor.Com)

For my business colleagues, note the Implications for Business section below.

Strategic Forecasting, Inc.
---------------------------

THE SECOND COLD WAR AND CORPORATE SECURITY

By Fred Burton and Scott Stewart

A lot has been written about last month's conflict between Russia and Georgia, and the continuing tensions in the region. Certainly, there were many important lessons to be gleaned from the conflict relating to the Russian military, Russian foreign policy and the broader geopolitical balance of power.

One facet of the Russian operations in Georgia that has been somewhat overlooked is the intelligence aspect. Clearly, the speed with which the Russian military responded to the Georgian invasion of South Ossetia indicates that they were not caught off guard. They knew in advance what the Georgians were planning and had time to prepare their troops for a quick response to the Georgian offensive.

It is important to remember that the Russian operation in Georgia did not happen in a vacuum or without warning. It was a foreseeable outcome of the resurgence of Russian power that began in 1999 when Vladimir Putin came to power, and an outward demonstration of Russia's increasing assertiveness. One important element of Russia's ascendancy under Putin has been a resurgence of the Russian intelligence agencies. The excellent intelligence Russia had regarding Georgian intentions in South Ossetia is proof that the Russian intelligence agencies are indeed back in force. But Putin's rise to power clearly demonstrates that while these intelligence elements may have been weakened, they were never totally gone.

As pressure continues to build between Russia and the West -- and as we perhaps slip closer to a second Cold War -- it is worth remembering that an actual armed conflict between NATO and the Warsaw Pact never took place despite military tension and some warfare between proxies. Rather, the Cold War was fought largely with intelligence services. Certainly, the Cold War led to the birth and rapid growth of huge intelligence agencies on both sides of the Iron Curtain. These intelligence agencies will also play a significant role in the current strain between Russia and the West.

The world has changed dramatically since the fall of the Soviet Union in 1991. In this age of globalization, e-commerce and outsourcing, there are many more Western companies with interests in Russia than during the Cold War. This means that an escalation of Cold War-type intelligence activity will have profound effects on multinational corporations.

Historical Context

The time period following the fall of the Soviet Union was catastrophic for Russia -- workers went unpaid, social services collapsed and poverty was epidemic. The oligarchs seemingly stole everything that was not nailed down and organized crime groups became extremely powerful. Public corruption, which had been endemic (though somewhat predictable) in the old Soviet system, worsened dramatically. Many Russians were ashamed of what their country had become; others feared it would implode entirely.

Into this chaos came Vladimir Putin, a former Soviet intelligence officer who ascended in Russian politics due in part to his significant connections. But Putin's rise was also largely aided by his firm handling of the second Chechen war in 1999 and the fact that he offered the Russian people hope that their national greatness could somehow be restored. While Putin left the Russian presidency in May 2008 and is now the prime minister again (as he was in the final months of the Yeltsin presidency), he continues to be immensely powerful and extremely popular. Most Russians believe Putin saved Russia from sure destruction.

A major part of Putin's strategy to regain control over the government, economy, oligarchs and organized crime groups was his program to reorganize and strengthen the Russian intelligence agencies, which had been severely atrophied since the fall of the Soviet Union. During the 1990s, politicians such as Mikhail Gorbachev and Boris Yeltsin saw a powerful intelligence agency as a potential threat -- with good reason. Because of this threat, laws were enacted to fracture and weaken the once-powerful agency. In 1991, the KGB was dismantled after a failed coup against Gorbachev in which some KGB units participated and tanks rolled onto Red Square.

Following additional failed coup attempts, the Federal Counterintelligence Service (FSK), the KGB's immediate successor, was split into several smaller agencies in 1995 under the perception that it remained too powerful. By creating competition among the smaller intelligence services, higher-ups hoped that additional coup attempts could be avoided. Following this shattering of the FSK, the counterintelligence core of the former KGB and FSK became known as the Federal Security Bureau (FSB). The foreign intelligence portion of the FSK became the Foreign Intelligence Service (SVR).

When Putin came into power, he instituted an ambitious plan to reconstitute the FSB. He has steadily worked to reconsolidate most of the splinter intelligence agencies back under the FSB, correcting much of the inefficiency that existed among the separate agencies and making the new combined agency stronger and more integrated. Moreover, since 1999, Putin has ensured that the FSB receive large funding increases to train, recruit and modernize after years of disregard. Currently, the SVR remains separate from the FSB, but other crucial components such as the Federal Border Service and Federal Guard Service have been reintegrated, as has the Federal Agency of Government Communications and Information (FAPSI), Russia's equivalent of the U.S. National Security Agency.

Additionally, Putin has tapped many former KGB and current FSB members to fill positions within Russian big business, the Duma and other political posts. Putin's initial reasoning was that those within the intelligence community thought of Russia the same way he did -- as a great state domestically and internationally. Putin also knew that those within the intelligence community would not flinch at his sometimes brutal means of consolidating Russia politically, economically, socially and in other ways. It could be reasonably argued that Russia has become an "intelligence state" under Putin.

Since assuming power, Putin has also worked to strengthen the Russian military and the GRU, Russia's military intelligence agency. The GRU was undoubtedly very involved in the operation in Georgia, as was the SVR. There are some who suggest that Russian agents of influence may have played a part in convincing Georgian President Mikhail Saakashvili to attack South Ossetia and spring a trap the Russians had set.

Implications for Business

Since the fall of the Soviet Union, foreign corporations have been very busy in Russia as they scramble for market share, attempt to profit from Russia's massive natural resources and seek to meet growing demand for consumer products. For these companies, growing Russian nationalism and tension with the West increases both the chance of regulatory and legal hassles and the possibility that Russian intelligence activity might be directed their way. In other words, as tensions rise, so could the risk for Western corporations.

Not all these problems are new. As a young KGB officer, Putin earned his living by stealing technology from the West. And he has since encouraged Russian intelligence agencies to expand their collection programs with the awareness that such information can assist the Russian economy and specifically the revival of the defense sector. While the Russians have an advanced weapons research and development infrastructure, they are very pragmatic. They do not see the need to spend the money to develop a technology from scratch when they can steal or buy it for a fraction of the cost and effort. This pragmatism was clearly demonstrated in their early nuclear weapons program.

Just as Russia's reinvigorated intelligence collection efforts were gaining steam, the United States was hit by the 9/11 attacks. As a result, domestic intelligence agencies in the United States and many other Western nations focused on the counterterrorism mission and diverted counterintelligence resources to help in that fight. It would take several years for the domestic counterintelligence efforts to get back to their pre-9/11 levels, and like the Chinese, the Russian intelligence services took broad advantage of that window of opportunity to recruit sources and obtain critical information from foreign companies. Additionally, the Russians have gone to great lengths to steal intellectual property from foreign firms operating inside Russia, either by infiltrating their companies with agents or by recruiting employees.

The Russians are not only drawn to companies that produce sophisticated military equipment. Like the Chinese and others, they are interested in collecting information on emerging technology that is not yet classified but has potential military application. These sectors include materials research, nanotechnology, advanced electronics and information technology. Ultimately, however, they will not turn their backs on the opportunity to obtain sophisticated current weapons system data.

Russian collection and recruitment efforts will also not be confined to Russia or the United States. The Russians can gain as much information by recruiting an American businessman in Tokyo, Vienna or Mexico City as they can from one they recruit in New York or Seattle, if they choose their target wisely. The Soviets and Russians have long enjoyed operating out of third countries. During the Cold War, their primary platform for collecting intelligence against the United States was Mexico City, and their preferred platform to collect against European targets was Vienna.

Former KGB officers are also heavily involved in trafficking Russian and Eastern European women for prostitution in Tokyo, Dubai and Miami. These former KGB officers could easily utilize their positions of access to identify potential recruits for friends at their old agency, perhaps for a profit -- consider how many former intelligence officers now are working as contractors for U.S. intelligence. The FSB/SVR might not be the KGB in name, but they clearly are the KGB in spirit and will not hesitate to use sexual or other blackmail if that is more effective than money, ideology or ego as a recruiting hook.

For Western companies operating inside Russia, an increase in tensions will, in all likelihood, mean an increased scrutiny of the companies' activities as well as an increased focus on their expatriate employees in an effort to recruit sources and to locate Western intelligence officers. Like it or not, all intelligence agencies use nonofficial cover to get their officers into hostile countries -- and corporate cover is widely used. Indeed, the Russians have long claimed that the United States and other countries have been using businesses and nongovernmental organizations to provide cover to intelligence officers seeking to undermine Russian influence in the former Soviet Union and to operate inside Russia itself.

Nonofficial cover officers (referred to as NOCs in intelligence parlance) are intelligence officers without visible links to their government and therefore not protected by diplomatic immunity. For this reason, NOC operations are somewhat riskier. Harder to identify as intelligence officers, NOCs are frequently assigned to sensitive tasks -- those that a host country counterintelligence service would dearly love to learn about.

Keeping this in mind, Russian counterintelligence services will be carefully looking over the business visa applications of Western companies. Surveillance activities on expatriate employees will also likely increase as the Russians work to identify any potential undercover intelligence officers. They will also seek to recruit expatriate and local employees who can act as spotters to identify any potential intelligence officers.

This surveillance of Western businesses may apply to both corporate offices and employees' residences. Businessmen may be physically surveilled and their residences subjected to technical surveillance and mail/garbage covers. Domestic workers may also be recruited in an effort to collect information on their employers. Known or suspected NOCs will be carefully watched and will likely even be overtly harassed.

So far, we have not heard of the Russians directing this type of aggressive surveillance activity against U.S. companies, or of U.S. companies having problems obtaining visas for their employees. But as the tensions increase between Russia and the United States, and as intelligence operations become increasingly hostile, it is only a matter of time before they do.

Copyright 2008 Stratfor.

6.12.2008

Privacy Advocacy, System Design, and Consumer Convenience

When I think about the properties of a system that requires personally identifiable information, two immediately come to mind. First, as a party relying on such information, I collect personally identifiable information (PII) in order to facilitate the discharge of an obligation on the part of the person who is the ostensible subject of the information. Once that obligation has been discharged (I have been paid), its has no further reason to exist.

However, consumers like "convenience" when returning to, say, BuyMyStuff.com - and thereby delight in allowing BuyMyStuff to retain their credit card numbers, expiration dates, and CVC code, (even though the latter is intended to demonstrate the physical presence of the card used). Merchants are happy to offer that convenience if it means customers will more frequently visit their site instead of a competitors. The unintended side-effect of the  merchant's retention of this data is  the creation of a target of opportunity.

One might argue that Privacy advocacy has reduced indiscriminate PII retention, or at least offered consumers with clearer "opt-out" clauses that have the same effect, and especially for cases where a Merchant retains consumer information in order to target them with more focused sales and marketing campaigns.

But the first case is the more problematic one, in that rather than retaining preferences and buying behaviours for the simple purpose of facilitating more spending, it is an attack vector for those who want to perpetrate fraud against the subjects of the data and their CC providers. You might call this kind of retention bad. I would agree.

There is also a privacy case which questions the extent to which governments should be permitted to surveil their populace. The data aggregation implied by the so-called "Real-ID" effort represents such a case, and paranoia aside, should give us reason to pause and ask "Why?" 

Systems designed with the principle of Fitness -for-Purpose necessarily constrain themselves to capabilities which support their primary objectives. The more general the design of "General Purpose Systems," the more unintended side-effects they will exhibit when broadly deployed. I believe this will be observed whether for so-called "Identity Management" (if it looks like user administration . . ., etc.) or "National Security" ("lets keep our borders secure!").

At the end of the day (I'm going home in a minute) - the systems we deploy should reflect explicit requirements and expected consequences, not hidden agendas and/or unintentional consequences. Our jobs should be to discover each, and be scrupulously honest about their implications to our customers and society at large. The degree of rancor which can be observed in this debate outside of our happy little corporation is I think a measure of the public's distrust of us in our design, or vendors (or governments) in their deployments. We might consider what it means to address each.

~r

4.15.2008

RSA 2008

Amazingly I was invited to speak a this year's RSA Conference in San Francisco. The topic was Digital Identity and Service Oriented Architecture. I even got to use my new green 5mw laser pointer. I got to use neo-logisms, talk about hebephrenia, and address the current state of federated identity management. I'll post the links to the presentation and mp3 here when published later this month.

Behnam Dayanim of Paul Hastings, and Ed Reed - Privacy Officer of EDS had a useful talk on international compliance. Ben is pointed and clear. Ed - passionate and distinct. I commend their chat when its available.

The RSA speaker's dinner (awesome h'ourdourves!) was held at the old Federal Reserve Building on Battery,  and I got to eat at the BEST sushi bar in San Francisco before my departure, Hamano Sushi, 1332 Castro - to which I was recommended many years ago by the concierge of the then All Nippon Airways (ANA) Hotel (now the Argent Hotel). Hamano Sushi is a neighborhood sushi bar, with an exquisitely fresh menu, and a delightful staff. Go , eat, enjoy! (But don't tell ANYBODY!)

I've been remiss in blogging this year. My apologies. May this year bring useful thoughts to you who've been directed my way. Bless you.

~r









3.10.2008

Vista Woes and Blithe Ignorance

My friend Michael sent me the following NY TImes Story, "They Criticized Vista. And They Should Know."

"A colleague's had a glossary of various definitions of "IBM." My favorite is of course "I Buy Mac." 

Having just upgraded to Leopard (Mac OS X 10.5) I am happily using all my "old stuff," along with some new software that was upgraded for Leopard users in mind. Oh yeah - in 3 years (this may) I haven't had one virus infection, only 2 system crashes (with the very first version of "Tiger" 3 years ago), and it just seems to connect and work. Even Lotus Notes runs natively and hasn't crashed since I moved to its GA release from the MAC beta. 

What's this got to do with Microsoft? Nothing. I think that's the beauty of it.