Google's share price topped $1,000 for the first time, sparking a flurry of reporting on this unimportant milestone. Sure, there are only four companies with share prices that high on US stock markets, but that's because Google, Warren Buffet's Berkshire Hathaway, the retailer Priceline and pork processor Seaboard eschew the common Wall Street practice of stock splits to keep the nominal price of their shares low.
Warren Buffett is famously opposed to the practice, and that's the reason that directly owning shares in his successful investment business is out of reach for all but the wealthiest (Berkshire Hathaway stock is currently trading at around $175,000 a share). But what put Google into the $1,000 a share club today is interesting: Surging profits, which saw the stock leap as much as 10 percent today. Google reported third quarter profits of $3 billion yesterday, up 36 percent from the same period a year ago. How did the company do it?
In the words of USA Today's Matt Krantz: "The Internet company showed again late Thursday just how lucrative its business of collecting and selling consumers' personal data to the highest bidder has become." That's right, Google is in the same business as the reviled National Security Agency. But rather than collecting reams of online data supposedly in the name of national security, Google collects data for sale to whoever has the money to pay.
Google is one of America's most admired companies, and tens of millions of people visit its online search engine, browse the internet with its Chrome browser, look at funny cat clips on YouTube, and navigate their cell phones with its Android software every day. And if you're worried about online privacy and data collection, there's no particular reason to trust a private, profit-motivated corporation with your information more than the grey suits over at the NSA.
The company is always on the lookout for new ways to monetize the personal information of its users.
For instance last Friday Google said that it would soon begin using some users pictures and comments in targeted advertising at their friends and family members. They way it would work is if a user has shared the information the he likes a restaurant or a store, Google would display the users picture and endorsement for ads for that business, targeted at people that belong to his online social network. Facebook has already moved in that direction, and Twitter is expected to start looking at similar approaches as it gears up for its IPO later this year.
The New York Times characterized the change as "the latest example of the continual push by Web companies to collate the reams of personal information shared online in the chase for profits."
A lot can be learned about a person by what videos they watch, whose addresses are in their online contact lists, what they search for and what they talk about online. That's why the NSA has been so interested in monitoring internet activity - and why Google is.
Is the US dollar's position as the reserve currency of the world imperiled as a result of the debt limit showdown in Washington?
The argument for "yes" has already grown stronger as a consequence of Republican use of the debt ceiling – which needs to be raised in order for the government to pay existing debts and other commitments like funding social security and medicare – as leverage to demand budget changes.
The federal government has been shut down for over two weeks now and the US Treasury says it may run out of money after midnight if a deal isn't struck in Congress. That looming deadline, which could trigger a default that would have catastrophic consequences for the US economy and all the foreign governments who have treated US bonds as the safest of safe havens in an uncertain world since World War II, is likely to focus the minds of US politicians. So a decision to avoid this self-inflicted wound is probably more likely than not (in the early afternoon, Senate Republicans said they've found a way to strike a deal.)
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But the tragedy of default averted doesn't mean there's no tragedy. There's an argument to be made that profound damage has already been done to America's financial standing in the eyes of the world. The simple choice of dancing right up to the blink of the cliff over what looks like the pettiest of politicking to foreigners has sent a message that the assumption that US treasuries are a rock-solid place to park your money needs to be reevaluated.
To be sure, the US has defaulted before. After British troops sacked Washington during the War of 1812, the US government defaulted in 1814. And in 1979 the US briefly defaulted due to paper work error – though the error was quickly rectified.
But a political choice to default, enabled by a harshly divided House and Senate, was until now unthinkable. Financially, the US and its elected leaders were the grownups in the room, aware both of the advantages America's preeminent position provides in cheaper borrowing and the responsibility for the health of a globalizing financial system. That assumption can be no longer made.
Michael Casey at the Wall Street Journal writes today that the US no longer deserves its gold standard AAA credit ratings from agencies like S&P, Fitch, and Moody's. He tells of how BlackRock Inc. CEO Laurence Fink, whose firm – the largest money manager in the world, with $4 trillion in assets – told a conference last week that the US is not a “principled nation.”
When men and women who control tens of trillions of dollars in US investments are indicating they’ve lost their faith in America, it goes to the very question of whether the US deserves to be at the center of world finance. So, whether or not Fitch Ratings follows through on the “Negative Watch” status that it placed on its top-notch US rating Tuesday, it’s clear now that the dysfunctional American political system no longer justifies a Triple-A rating from anyone.
It matters not whether the US is actually forced into a devastating default – still an extremely unlikely event. Triple-A credits do not behave like this.
In top-rated countries, politicians do not use instruments like the federal debt ceiling as an extortionist political tool. In allowing that to happen, the US is abrogating its responsibilities as issuer of the world’s reserve currency and as protector of the “risk-free rate.”
Rock-ribbed American capitalists like BlackRock's Mr. Fink aren't alone. Over the weekend, the Chinese government news service Xinhua ran a commentary arguing "it is perhaps a good time for the befuddled world to start considering building a de-Americanized world." The piece is filled with pot shots at America's standing in the world that are standard for Xinhua, but also reflects the real concern that the US and its rogue politicians are no longer safe trustees of the global financial commons.
Most recently, the cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized.
Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.
... What may also be included as a key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant US dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.
China is believed to have more than half of its financial reserves in dollar-denominated debt – well over $1.5 trillion. The US Treasury said as of July that China held nearly $1.3 trillion in federal government debt, making it the largest foreign lender to the US, closely followed by Japan, with $1.2 trillion. In all, foreign countries have about $5.6 trillion parked in US Treasury securities – something that has helped keep US borrowing rates at among the lowest levels in the world and helped the country weather the economic storm of the past few years. Of late, both China and Japan have been pulling out of US debt at a near-record clip, a reflection of the fact that the assumption that the US isn't crazy enough to default over politics is no longer a safe one.
Reuters columnist Felix Salmon wrote a good piece on the inevitable loss of trust in America on Monday. He rightly points out that "if you really do expect zombies to start roaming the streets the minute that the US misses a payment on its Treasury obligations, you’re likely to be disappointed." Yes, the world will not come to an end. But:
The harm done to the global financial system by a Treasury debt default would not be caused by cash losses to bond investors. If you needed that interest payment, you could always just sell your Treasury bill instead, for an amount extremely close to the total principal and interest due. Rather, the harm done would be a function of the way in which the Treasury market is the risk-free vaseline which greases the entire financial system. If Treasury payments can’t be trusted entirely, then not only do all risk instruments need to be repriced, but so does the most basic counterparty risk of all. The US government, in one form or another, is a counterparty to every single financial player in the world. Its payments have to be certain, or else the whole house of cards risks collapsing — starting with the multi-trillion-dollar interest-rate derivatives market, and moving rapidly from there.
And here’s the problem: we’re already well past the point at which that certainty has been called into question.
There are signs that the ratings agencies, rarely leading indicators, are catching up to this reality. Fitch said yesterday it's considering cutting the US government's AAA credit rating. Why?
"The US authorities have not raised the federal debt ceiling in a timely manner before the Treasury exhausts extraordinary measures. The US Treasury Secretary has said that extraordinary measures will be exhausted by 17 October, leaving cash reserves of just $30 billion. Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default," the agency wrote. "The repeated brinkmanship over raising the debt ceiling also dents confidence in the effectiveness of the US government and political institutions, and in the coherence and credibility of economic policy. It will also have some detrimental effect on the US economy."
S&P downgraded US debt from its highest grade during the last debt-showdown in 2011. Moody's still pegs US debt at its highest rating, and is not currently considering a downgrade.
Make no mistake. If almost any other country in the world had flirted with voluntary default twice in the span of two years (the least debt ceiling crisis was in August 2011), their rating would have been cut already. The US still maintains a preeminent global financial position, and as the travails of the eurozone have shown, there is not as yet a good alternative to the good old greenback.
But other countries are thinking hard about alternatives. Whatever is or isn't resolved in DC today, that is a fact that US and the rest of the world will now have to live with.
The latest scoop to come out of the documents that former National Security Agency contractor Edward Snowden has been providing to journalists is that the NSA has been harvesting vast numbers of emails and other contacts from online contact lists around the world.
The Washington Post reported yesterday that "hundreds of millions of contact lists" are being sucked up from web servers abroad, many of them inevitably of American citizens. It's the sort of bulk data collection that privacy activists have been angry about. The US isn't going after, say, the contact lists of identified potential terrorists or other foreign intelligence targets. Rather, it appears to be hoovering up everything it can get its hands on.
But given past Snowden revelations about NSA practices, the fact that the NSA was likely to be doing this kind of thing isn't a surprise. Which is why I find this sentence in the thorough article so interesting: "The collection depends on secret arrangements with foreign telecommunications companies or allied intelligence services in control of facilities that direct traffic along the Internet’s main data routes."
In the debate about NSA data-mining from telecommunications companies and popular Web services like Google, the US has often been framed as a sort of rogue actor - a big bully spying willy nilly on people around the globe simply because it can. For instance, Guardian columnist Glenn Greenwald, who broke the first Snowden stories, has crafted his pieces to make the US look as bad as possible, while generally neglecting the spying of other nations.
In a story for Brazil's O Globo based off Snowden material, for instance, Greenwald wrote about US spying on the Brazilian government, while neglecting to mention Brazil's own spying on foreigners and its own citizens. Greenwald resides in Brazil.
In the broader Internet discussion about the revelations, there's been talk about ending the key US role in routing global Internet traffic. Brazilian President Dilma Rousseff is considering measures requiring Brazilian Internet users' information to be stored only on servers in the country. The move is ostensibly to make it harder for the NSA to get at it. Deutsche Telekom of Germany has said it will start channeling all domestic Internet traffic through servers in the country (emails within a country are often bounced through servers abroad), and says it wants an agreement with other telecommunications companies in Germany to do the same.
But it's clear that while the US is a data-mining heavyweight, large numbers of other governments are in on the act. A recent story in Ars Technica points out that Germany has legal measures that require email and other Internet services to provide customer data if handed a court order. They're also legally bound from saying if they've received an order for data. While laws vary from country to country, Europe in general does not, at first glance at least, seem like a haven from surveillance.
European Union "law does not explicitly protect against access by European intelligence services, but member states law and practice does," Ralf Bendrath, the senior policy adviser to a German member of the European Parliament, told Ars.
Elsewhere? Russia maintains a vast domestic surveillance state of its own. A report in Russia last week alleged that the government's FSB security service has installed a surveillance system that will enable them to intercept and read virtually every digital communication in Sochi during the 2014 winter Olympics.
Returning to the Washington Post story, who are the foreign telecommunications companies and foreign governments assisting the NSA? Regarding the first group, the article doesn't say. The story does refer to data collection by an "Australian intelligence service on the NSA’s behalf" but doesn't name any other countries. There are certainly many more. And if foreign governments are willing to collect Internet data on behalf of the US, you can count on it that they're collecting for themselves.
This is not to suggest the expansion of surveillance enabled by the Internet age isn't troubling. It's just that the US is not alone, with many partners and enemies abroad doing much the same. And those countries haven't found their Snowden yet.
The assassination of Logar Governor Arsala Jamal today is just the latest reminder that the Taliban remain a power to be reckoned with in Afghanistan after 12 years of war. Meanwhile, talks on extending the US presence in the country beyond next year are going nowhere fast, in part because of the Taliban's continuing ability to threaten the lives of senior leaders.
Mr. Jamal was murdered at a mosque, by a bomb hidden in the microphone he'd just started speaking through, at a service to commemorate Eid al-Adha, the Muslim day of sacrifice. There had been at least four previous attempts on his life.
Jamal was not just any governor. A confidante of Afghan President Hamid Karzai, Jamal was Karzai's campaign manager in the fraud-plagued 2009 election that returned Karzai to power. With Afghanistan gearing up for new presidential elections next spring and with President Karzai term-limited from office, he was likely to play a key role in Karzai's efforts to maneuver a candidate of his preference into the top seat.
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His death, probably at the hands of the Afghan Taliban given the movement's strength in Logar, is just the latest in a long line of senior officials killed by the group.
The governor of a district in Kunduz province was killed by a suicide bomber at the end of August. Kunduz Governor Muhammad Omar was killed by a Taliban attack on a mosque in October 2010. Since 2006, when the first post-invasion governor was killed by the Taliban, at least 21 governors, members of parliament, senior police officials, and senior government administrators have been assassinated (my own informal count; the real number is probably higher).
The continued targeting of government officials by the Taliban does not indicate the movement is particularly interested at peace talks at the moment. In fact, the Taliban probably thinks it's holding a winning hand, with the prospect of a full NATO and US military withdrawal from Afghanistan at the end of 2014 becoming more likely.
The US insists a deal will be struck to keep US troops in Afghanistan. But the winds have not been favorable lately.
US Secretary of State John Kerry said at a press conference with Karzai on Saturday that a so-called “Bilateral Security Agreement,” which would provide the legal authority for an extended US presence in the country, was close to being nailed down.
"We have resolved in these last 24 hours the major issues the president went through," Kerry told reporters, shortly after Karzai recited his now familiar list of criticisms of US military actions in Afghanistan.
Secretary Kerry's upbeat tone doesn't stand up to scrutiny, however. Part of what Kerry and Karzai agreed to was leaving the question of immunity for US troops from Afghan prosecution to the parliament and a planned loya jirga (a gathering of senior tribal figures) next month.
Immunity is the biggest of the major issues standing in the way of a security agreement. Karzai's constant bristling at what he describes as US military brutality is embedded in a deep political reality: Most Afghans don't like foreign troops in their homes and towns, and consider the elevation of foreigners above national laws a slap in the face.
To have US troops subject to Afghan law and prosecuted by the country's corrupt police and court system would be unthinkable for President Barack Obama (or any other US leader). Imagine a US soldier dragged before a politicized Afghan court for alleged crimes carried out during combat duties.
So the equation is simple: No immunity, no Bilateral Security Agreement. But since immunity is a hot-button issue for Afghan politicians and average citizens alike, it's hard to see both a loya jirga and the parliament signing off on the idea.
While the current arrangement has more than a year to run, planning for an extended mission in Afghanistan gets more difficult with each lost day. In July, Gen. Martin Dempsey, the chairman of the US Joint Chiefs of Staff, said for planning purposes, he wanted an agreement in place by this month.
Meanwhile, the Taliban reiterated its opposition to a continued foreign military presence in a press release reportedly written by Afghan Taliban leader Mullah Omar today, warning government officials not to approve an extended US presence beyond the end of 2014.
"Those who would sign could not be called a representative loya jirga of the country. Their decisions are not acceptable," the statement quoted Omar as saying. "The invaders should know that their limited bases will never be accepted. The current armed jihad will continue against them with more momentum."
Given its demonstrated ability to kill Afghan politicians, his words will be closely considered by both members of parliament and delegates to the loya jirga.
(This story was edited after first posting to correct how long the US has been at war in Afghanistan).
At about 8 this evening, CNN reporters started sharing a scoop on social media: The Obama administration had decided to suspend all aid to Egypt, citing the violent suppression of political dissent in the country since a July 3 military coup removed the Muslim Brotherhood's Mohamed Morsi from the presidency.
Here's what CNN's national security correspondent Jim Sciutto wrote on Twitter:
US to suspend aid to #Egypt - "decision has been made...will take effect in coming days" - US official— Jim Sciutto (@jimsciutto) October 8, 2013
"US to suspend aid to Egypt" has a pretty clear meaning. Not some aid, or not for a few days or weeks or months but "suspended." Cut off, halted, all of it.
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CNN's website soon followed with a news story that begins: "The United States will cut off military aid to Egypt in the wake of the July coup against President Mohamed Morsy and the turmoil that has followed, a U.S. official said Tuesday."
Ok, not all aid. Just the $1 billion plus in annual military aid to Egypt, most of which is spent on buying military hardware from US private defense contractors like General Dynamics, which has supplied Abrams tanks to Egypt for years. The news organization cited an unidentified "US official" for the claim.
The White House soon emailed a statement to reporters saying the story was not true. The Monitor's White House Correspondent Linda Feldmann shared the statement with me. The emailed statement says it can be attributed to National Security Council (NSC) spokeswoman Caitlin Hayden and reads in full: "The reports that we are halting all military assistance to Egypt are false. We will announce the future of our assistance relationship with Egypt in the coming days, but as the President made clear at UNGA (United Nations General Assembly), that assistance relationship will continue."
One can focus on language – the difference between "cut off" and "suspend" in CNN's telling versus the administration's statement that "reports that we are halting all military assistance to Egypt are false." Perhaps this means that some small amount of funding for Egyptian officers to come and train with the US military here will be maintained, but big-ticket transfers will be cut off.
Or perhaps CNN just got a story badly wrong. We don't know yet, and the problem with this kind of anonymously sourced story to one lone "official" is that follow-up is difficult.
Repression by Egypt's military-led government since it seized power in July has only grown worse, and the use of heavy-handed tactics against dissenters like the Muslim Brotherhood has been on the rise. On Sunday, over 50 Egyptians – many protesting against the ouster of Morsi – were killed in clashes, and Egyptians are worried that protests called for Friday against the military takeover will lead to more bloodshed.
Aid has flowed continuously to Egypt from the US since the Camp David accords were signed between Egypt and Israel in 1978 – over $60 billion and counting. While Egypt's current military rulers have cultivated new sources of foreign aid, particularly from Saudi Arabia, the US is still deeply entangled with regional security arrangements, particularly when they come to Egypt and Israel. An aid cut-off now, especially since the Obama administration didn't act beyond a symbolic delay of some military hardware after the July coup, would be surprising.
But while it's probable that CNN got much wrong in its early reporting of a US aid suspension to Egypt, it's improbable that some kind of restriction isn't coming down the pike. That was signaled in the NSC spokeswoman's statement where it was written: "We will announce the future of our assistance relationship with Egypt in the coming days."
This is a developing story and all caveats apply. I thought this comment from Steven Cook, a keen observer of the US-Egyptian relationship at the Council on Foreign Relations, shortly after CNN's first reports of the story came out, was astute:
Change is indeed coming. Where exactly it leads, of course, is another matter.
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Afghan President Hamid Karzai marked the 12th anniversary of the US-led NATO invasion of Afghanistan that dislodged the Taliban from power and ended up installing him as leader by saying that Afghan women have nothing to fear from a return of Taliban influence and that nothing has been really gained thanks to the foreign military effort in the country.
Karzai's remarks come as the clock is ticking on a so-called Bilateral Security Agreement to be inked between NATO and Afghanistan. If an agreement isn't reached, including guarantees that US forces won't be subject to Afghan law, all US troops will depart from the country at the end of next year. While there's still time for a deal to be reached, Gen. Martin Dempsey, the chairman of the joint chiefs of staff, said in July that an agreement any later than October would make planning for an ongoing mission beyond the end of 2014 much more difficult.
But Karzai's comments today to the BBC's Newsnight weren't exactly outreaching, and makes one wonder if he's not interested in retaining the services of foreign soldiers. He's tried to use the drawn out negotiation over the BSA to wring more aid and weaponry out of the US, as well as far-reaching security guarantees. But with a war-weary American public and fights over the US budget deficit at home for Obama, walking away from Afghanistan becomes more likely with each passing day and insult tossed at the US and its partners.
Today Karzai complained that the US administration's descriptions of his government as an "ineffective partner" is because the US "want us to keep silent when civilians are killed. We will not, we can not."
He said that relations with the US soured because the US under President George W. Bush decided not to broaden the war to Pakistan in 2005. Instead of fighting "in the sanctuaries and training grounds beyond Afghanistan," Karzai said, "the US and NATO forces were conducting operations in Afghan villages, causing harm to Afghan people."
The Afghan President, asked if Afghan women should have any fear about a possible entry of the Taliban into government, answered: "None. None at all."
Karzai also said most of the "big" corruption in Afghanistan was the work of foreigners, not Afghans, and that much of the money spent was used to "buy submissiveness of Afghan government officials to policies and designs that the Afghans would not have agreed to."
He also said the massive 12 year war effort has largely been a waste: "On security front, entire NATO exercise was one that caused Afghanistan a lot of suffering and a lot of loss of life and no gains because the country is not secure. I am not happy to say there is partial security because that is not what we’re seeking. What we wanted was absolute security and a clear cut war against terrorism."
Below is a transcript of the BBC interview I took down while listening (which can be watched here.) The interviewer's questions are approximations; Karzai's answers are his precise words.
Karzai interview transcript
Q: The country has come a long way in the last 12 years. Why do the Americans call “you an unreliable ineffective partner?”
A: Because where they want us to go along, we won’t go along. They want us to keep silent when civilians are killed. We will not, we can not.
Q: Did you get on with Bush better than Obama?
A: I had a very good relationship with President Bush in those beginning years there was not much of a difference of opinion between us. The worsening of relations began actually in 2005 where we saw the first incidents of civilian casualties where we saw that the war on terror was not conducted where it should have been, which was in the sanctuaries and the training grounds beyond Afghanistan, rather than that the US and NATO forces were conducting operations in Afghan villages, causing harm to Afghan people.
Q: Are you talking to the Taliban, personally?
A: Yes we are. Yes, we are. We have our whole system engaged in several directions to bring stability and peace to Afghanistan
Q: Is the goal to bring them into a power-sharing deal in government?
A: Absolutely. They’re Afghans, where the afghan president, where the afghan government can appoint the Taliban to a government job, they’re welcome we will do that. But where it’s the afghan people appointing people through elections to state organs then the Taliban should come and participate in elections. So to clarify this, yes as Afghans they are welcome to the Afghan government, like all other Afghans. Yes, as Afghans they are welcome to participate in elections as all other afghans.
Q: US/UK audiences might ask what was all this for then? 12 years fighting, lives lost, and the Taliban can just walk back in and be part of government.
A: Well the Americans have told us themselves in Washington in my last visit that the Taliban are not their enemies. That they will not fight the Taliban anymore.
Q: What are you talking about with the Taliban?
A: If the Taliban have reasons for which they can not come they must spell this out. If it is the Afghan constitution, they must come out and talk to us and allow the Afghan people and through the mechanisms that we have to amend the constitution.
Q: Gains for women are tenuous. By bringing the Taliban back aren’t you compromising those gains?
A: The return of the Taliban will not undermine the progress. This country needs to have peace.
Q: But you know where they stand with women’s rights. Are you willing to sacrifice women’s rights?
A: I’m willing to stand for anything that will bring peace to Afghanistan and through that to promote the cause of the Afghan woman better… there is no doubt about that. Even if the Taliban come that will not end, that will not slow down.
Q: So women in Afghanistan should not fear the return of the Taliban?
A: None at all. None.
Q: The bilateral security agreement. Let’s talk about that. That defines the US and Afghan relationship beyond withdrawal and if you push too hard they may not stay. Does that worry you?
A: Well if the agreement doesn’t suit us then of course they can leave. The agreement has to suit Afghanistan’s interests and purposes. If it doesn’t suit us and if it doesn’t suit them then naturally we’ll go separate ways… if this agreement does not provide Afghanistan peace and security the Afghans will not want it. That’s very clear.
Q: Britain has made a massive contribution already. Can you tell the British public what all these sacrifices were for because they don’t understand why they’re still here.
A: All the prime ministers that came were in office in the past 12 years have clearly stated that they’re here in Afghanistan to provide security to the West in order to prevent terrorism from reaching the west in order to fight extremism here. How much of that has been achieved is a question that the British government can answer alone.
Q: Can you assess for me the criticism and failings that were experienced in Helmand (a major combat focus for British troops in past years).
A: It’s not only Britain. On security front, entire NATO exercise was one that caused Afghanistan a lot of suffering and a lot of loss of life and no gains because the country is not secure. I am not happy to say there is partial security because that is not what we’re seeking. What we wanted was absolute security and a clear cut war against terrorism.
Q: Some would say your legacy has been tainted by Afghan corruption, it’s the third most corrupt country in the world. Is that the legacy you wanted?
A: No of course not. Our government is weak and ineffective in comparison to other governments we’ve just begun. But the big corruption the hundreds of millions of dollars of corruption was not Afghan, now everybody knows that. It was foreign, the contracts, the subcontracts, the blind contracts given to people. Money thrown around to buy loyalties, money thrown around to buy submissiveness of Afghan government officials to policies and designs that the Afghans would not have agreed to. That was the major (part?) of corruption.
Q: Finally, there isn’t a single living afghan leader. They’ve all been killed. Are you concerned about your safety when you leave office?
A: Not at all, I’ll be safe.
Ovadia Yosef, an ultra-orthodox Sephardic Israeli rabbi whose popularity among religious Israelis, particularly those whose families came to Israel from the Arab world, led to the creation of the Shas movement and a hard lurch right in Israeli politics, is being praised throughout Israel after his passing today.
Hundreds of thousands of his supporters took the streets of Jerusalem to mourn. Former Israeli President Shimon Peres visited with Mr. Yosef at his hospital bedside just hours before he passed, tenderly kissing his hand and forehead, according to The Jerusalem Post. Israeli Prime Minister Benjamin Netanyahu, in a statement issued by his office, spoke of his "profound grief" and said that "the Jewish People have lost one of the wisest men of his generation."
There is no doubt that Yosef is a major figure in Israeli political and social history – he arrived in Israel at the age of four, in the mid-1920s, and the power of the political movement he built is responsible for the public praise he's garnering today. But Yosef's undisguised bigotry and religious political extremism could also prove awkward for politicians like Mr. Netanyahu, who just last week complained that Iranians aren't allowed to wear jeans or listen to Western music by the country's own religious extremists (never mind that neither of his assertions were true).
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Netanyahu has been campaigning of late against any rapprochement between the US and Iran, warning that seeming Iranian willingness to negotiate over its nuclear program is a trap and that the Islamic Republic's leaders are fundamentally unstable and untrustworthy.
"They’re governed by Ayatollah Khamenei. He heads a cult. That cult is wild in its ambitions and its aggression,” Netanyahu told NBC last week. In his speech at the UN last month, he complained of the "fanaticism" of Iran's religiously based state.
Yet he and many Israeli leaders embrace and praise Yosef, the Baghdad-born cleric who served as Israel's chief Sephardi rabbi for a decade before focusing on direct political power. His religiously inspired views have given more political power to clerics in Israel, and his ultimate agenda frightened non-Jews.
For instance, in 2010 he said in a weekly Saturday night sermon that the sole purpose God put non-Jews on earth was to be servants to Jews.
"Goyim (gentiles, non-Jews) were born only to serve us. Without that, they have no place in the world – only to serve the People of Israel," he said, according to the Jerusalem Post. "Why are gentiles needed? They will work, they will plow, they will reap. We will sit like an effendi and eat. That is why gentiles were created." An "effendi" is a lord, or a master, in Arabic.
Yosef also favored the large number of ultra-Orthodox men who eschew modern education, focus only on Torah study, and are exempted from military service in Israel while largely subsisting on government handouts.
It was his comments about non-Jews that were the ugliest. In 2010 he said of Palestinian Authority President Mahmoud Abbas and the people he leads that "all these evil people should perish from this world. God should strike them with a plague, them and these Palestinians."
On Arabs in general, he said in 2001, "It is forbidden to be merciful to them. You must send missiles to them and annihilate them. They are evil and damnable." In 2009 he said of Muslims "their religion is as ugly as they are."
That sort of rhetoric, when heard from Arab or Iranian clerics directed towards Israelis or Jews in general is usually (and rightly) harshly condemned by Israeli leaders like Netanyahu as beyond the pale.
Yosef also had regressive views on the role of women and gays in society. In 2007, angry that many Ashkenazi rabbis supported allowing women to say a blessing over Shabbat candles after they'd been lit, he said: "Women should make (stew) and not deal with matters of the Torah." He said that any disagreement with him was the fault of "a few stupid women. A woman's knowledge is only in sewing."
As for gays and lesbians, he said they were "completely evil."
To be sure, it's not just in Israel where Yosef was popular. Bill de Blasio, the democrat who's the current front-runner to be mayor of New York, had this to say about the departed rabbi today:
Millions of people around the world lost a leader today in Rabbi Chacham Ovadia Yosef. His wisdom, charity and sensitivity were legendary.— Bill de Blasio (@BilldeBlasio) October 7, 2013
In 2010, Ross Ulbricht, a ferociously bright young man working at the edge of material science at Penn State, walked away from his budding research career for what he felt was a nobler application of his energies: a quest for utopia.
On his LinkedIn page, he explained that in the five or so years since he'd earned a bachelors degree in physics from the University of Texas at Dallas "my goal during this period... was simply to expand the frontier of human knowledge." He now had grander plans:
Now, my goals have shifted. I want to use economic theory as a means to abolish the use of coercion and agression (sic) amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.
That passage would be familiar to anyone who's ever participated in the online forums where the Internet's seemingly endless supply of techno-libertarians roam free. A young, technically-competent young man with a hard science or engineering background, issuing his digital Randian yawp: "I'm going Galt, and I'm going to reshape the world!"
The vast majority of the time, the vow is just bluster. But if the FBI is to be believed, Mr. Ulbricht not only followed through, but did so by burrowing deep into the dark underbelly of digital commerce, earning vast fees for himself and learning a fair bit about violence and coercion into the bargain. Going by the Internet handle "Dread Pirate Roberts" (the name of the semi-mythical scourge of the high seas from 1987's The Princess Bride), he founded the lawless and secretive online marketplace Silk Road, which relied on the virtual Bitcoin currency and the world's legions of drug dealers, credit-card thieves, and money launderers for traffic.
Before he was exposed as Ulbricht, "DPR" dressed up his activities in the same high-minded rhetoric found on his LinkedIn page. For instance, in August of this year, he gave an online interview to Forbes.
In addition to apparently falsely claiming that he was not Silk Road's founder (a nod to The Princess Bride; while the fearsome Dread Pirates Robert was thought to be one man, he was actually a succession of men who made their fortunes and then retired, passing the mantle on to a successor) he laid out his philosophy of the state as ogre.
"At it’s core, Silk Road is a way to get around regulation from the state," he told Forbes. "If they say we can’t buy and sell certain things, we’ll do it anyway and suffer no abuse from them. But the state tries to control nearly every aspect of our lives, not just drug use.. If it wasn’t clear before that the state is your enemy, it should be now that the biggest covert intelligence agency in the biggest government on the planet has been stealing nearly everyone’s private communications. We have the technology right now to make this impossible for them."
Ulbricht took in roughly $80 million in fees while processing over $1 billion worth of transactions until his site was shut down this week, after months of US government infiltration of the site and its practices. FBI agents tailed him to a library in San Francisco, waited until he'd logged into his computer and entered his passwords and then pounced - making their arrest and getting access to all of the transactions and logs he'd boasted in online forums as "DPR" they'd never be able to get their hands on.
It turns out US law enforcement has been investigating the site, including undercover purchases of heroin, cocaine and other drugs from vendors, since Nov. 2011. In July of this year, US border agents intercepted a package destined for an address in San Francisco that contained 9 counterfeit identity documents. The picture in each document was of Ulbricht, the indictment says, and the address led them to his place of residence.
Ulbricht has been charged with soliciting murder-for-hire, drug trafficking, money laundering, and computer hacking.
According to the indictment, he tried to have an anonymous user of the site going by the name "FriendlyChemist" killed after the user tried to extort $500,000 from him in exchange for not releasing a list of the site's customers identities. The "Chemist" entity said it owed money to a drug supplier, and Ulbricht as "DPR" (Dread Pirate Robert) asked to talk to the supplier.
A Silk Road customer named "redandwhite" contacted Ulbricht, and identified as the supplier. "FriendlyChemist aside, we should talk about how we can do business. Obviously you have access to illicit substances in quantity and are having issues with bad distributors. If you don't already sell here on Silk Road, I'd like you to consider becoming a vendor," DPR wrote on March 25.
On March 26, DPR contacted redandwhite again. "In my eyes, FriendlyChemist is a liability and I wouldn't mind if he was executed." DPR, according to the indictment, then provided the real name and town of residence of FriendlyChemist. A few days later, FriendlyChemist turned up the heat on DPR again, threatening to release the names of 2 dozen Silk Road vendors and about 5,000 account holders if he didn't receive $500,000 fast. A few hours later DPR again contacted "redandwhite," asking how much it would cost to "put a bounty" on FriendlyChemist's head. On March 30, redandwhite responded $150,000 to 300,000 depending on whether the murder was "clean" or "non-clean."
To this DPR complained, writing (according to the FBI) that "the price seems high. Not long ago, I had a clean job done for $80k."
Is DPR Ulbricht? The FBI insists it was his account. And in the process of Ulbricht soliciting the murder of "FriendlyChemist" (who could well have been an FBI plant, as could have "redandwhite"), this line attributed to Ulbricht stands out. This "kind of behavior is unforgivable to me," DPR wrote on March 30. "Especially here on Silk Road, anonymity is sacrosanct."
Yes. Instead of the libertarian paradise that Ulbricht said he was seeking to build, one free of the "violence and coercion" of government, Ulbricht appears to have set himself up as judge and executioner of a man for violating his criminal operation's law that "anonymity is sacrosanct." This extreme pose, if not the extreme step, is fairly common in internet circles. Government coercion is "bad" - but freedom to do whatever the heck one wants, even if that tramples on the freedoms of others, is good. And anonymizing networks like Tor (which was required to access the Silk Road website) will keep you free, no matter what.
That fantasy came crashing down for Ulbricht because while Tor might hide your internet protocol address and location, it can't do much to prevent good old fashioned investigative tools - or the fact that we all live in the real world, not the virtual one. A second indictment of Ulbricht for soliciting murder and torture lays out how compromised he's been, and for how long. It turns out the "clean hit" he thought he'd paid $80,000 for was arranged via the FBI.
In December of last year an undercover FBI agent posing as a cocaine dealer developed a relationship with Ulbricht, who eventually arranged a drug purchase through the agent. After the drugs were delivered to an employee of Ulbricht's, the feds arrested the employee.
An angry and concerned Ulbricht then contacted the FBI undercover in January of this year, and asked if he could arrange to have the arrested employee tortured as a way to force him to return bitcoin that Ulbricht alleged the employee had stolen from Silk Road customers. After thinking on it a day, he contacted the undercover again: "Can you change the order to execute rather than torture," Ulbricht asked, according to the indictment.
The agent agreed, and after receiving a $40,000 down payment on an $80,000 murder contract (Ulbricht wired the money to an FBI controlled Capital One bank account in Washington DC), provided Ulbricht with a series of faked torture pictures, and ultimately a faked picture of the employee he said proved he was dead, as evidence he'd held up his end of the bargain. Upon being told his employee was dead, Ulbricht wrote: "I'm pissed I had to kill him... I just wish more people had some integrity."
Many people are obsessed with anonymity and privacy online, and many for good reasons. Edward Snowden, the NSA leaker who appears to have strong libertarian leanings of his own, says his concern about government prying into private citizens' lives is what drove him to betray the US government's secrets. Ulbricht's comments to Forbes indicate he sees himself as similarly motivated.
But in the end, utopian dreamers of the day often find themselves presiding over fresh horrors. Ulbricht, as Dread Pirate Roberts, told Forbes: "Sector by sector the state is being cut out of the equation and power is being returned to the individual. I don’t think anyone can comprehend the magnitude of the revolution we are in. I think it will be looked back on as an epoch in the evolution of mankind."
If the FBI's case against Ulbricht stands up, we've had a glimpse of where his revolution was heading and we're probably lucky that his "Silk Road movement" (as he described it to Forbes) has foundered.
The trip was to begin with a visit to Indonesia for the Asia Pacific Economic Cooperation (APEC) summit, then a jaunt to Brunei for two major regional summits. Planned bilateral visits to Malaysia and the Philippines at the back end of the trip had already been cancelled.
To be sure, President Obama had a full agenda: vital issues touching on regional maritime security, border disputes in the South China Sea, and one of the largest free trade areas in history. Long-term US economic and security interests are at the heart of all of it. Over $5 trillion in global trade passes through the South China Sea each year, making it perhaps the greatest hotspot of global commerce.
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The rise of China as the region's dominant economic power and arguably its future military one has created both threats and opportunities for the US and its regional partners. In the past few years Obama has made senior US government representation at regional summits a priority, as a way of sending a message that the US is not going to turn its back on a region that is responsible for so much of America's prosperity.
So it’s understandable that Obama's cancelled trip is seen as something of a diplomatic catastrophe. To a certain extent that's right, though it perhaps gets cause and effect back to front. While America's global diplomatic standing would undoubtedly be better off without the budget fight in Congress, the dysfunction and distrust within America's domestic institutions rightly make thoughts of trips abroad at the moment ridiculous.
Nothing positive enough to outweigh the potential catastrophe of a US default, which would have ripple effects throughout the global economy, could come from this trip. The political impasse at home makes it almost impossible to think that any great breakthroughs would be possible.
Consider the APEC Summit that Obama is skipping. Leaders from almost every Pacific rim nation will be in attendance, and while many APEC summits have been dreary snoozefests in its 24-year history (usually enlivened by world leaders posing for group pictures in variations of national dress) this one promised to be different.
On the table for serious discussions at APEC is the Trans-Pacific Partnership agreement. The US has been shopping this free trade zone since 2009 and Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam are interested. The US government has called the partnership "the cornerstone of the Obama administration's economic policy in the Asia Pacific" and the stakes are high: A free trade agreement across all those markets would be the largest in US history, and one of the largest in human history.
Asia has been the bright spot in global growth in recent years, led by China (which is conspicuously absent from the partnership talks) but with the whole region fairly booming while growth has lagged in the US, and stalled across much of Europe. With World Trade Organization talks also stalled, the US is seeking to lock in access elsewhere. The presence of Obama at talks on the agreement, rather than Secretary of State John Kerry, who's going in his stead, sends a message of US commitment.
China has been suspicious of the partnership agreement, viewing it as having the potential to represent a trade bloc opposed to its own interests. Obama won't be at APEC, particularly missing the all-important side-bar meetings with other foreign leaders, but the Chinese delegation led by President Xi Jinping will be there bending the ears of all and sundry about his country's increasingly powerful role.
So Obama's absence is bad, right? Well, not exactly.
The same political divide at home that led Obama to cancel this trip is probably going to stand in the way of the US ratifying a new, sprawling free trade area, which would almost certainly involve painful concessions on the US side (you have to grant market access to get market access). While the Republican party has been the traditional party of big business and free trade, it's hard to imagine the current Republican-controlled House signing off on an Obama-brokered deal to remove tariffs and other trade barriers for a host of countries.
In September, Obama said he wanted Congress to grant him the power to submit a completed partnership agreement to Congress for an up or down vote, without legislators having the power to insert amendments. Obama wants that power - called Trade Promotion Authority - so that he can make deals with foreign governments and deliver on them, but Congress is leery of giving him that power. It's not just some Republicans: many Democrats are wary of the TPP, which they say could lead to severe disadvantages for US workers.
As things stand now, granting Obama Trade Promotion Authority, in a crowded legislative calendar with far more pressing issues, isn’t likely any time soon.
So Obama isn't going to Asia. That's not great for his agenda, and perhaps not great for long-term US interests. But until the current mess in Washington is sorted out, there's no much that he can promise to other nations.
Sometimes even the leader of the world's sole remaining superpower has to get his own house in order before he can take his agenda to the world.
There has been much discussion of whether the murders and siege at Westgate, one of the poshest malls in East Africa, indicate a resurgence for the Somali group or the desperate act of a desperate terrorist movement. This is in some ways the wrong question.
A group of committed men with rifles will almost always have the capacity to take over a shopping mall, or a hotel, or even a school and wreak havoc, particularly in parts of the world like Kenya, which has a highly unstable and lawless neighbor in Somalia on its northeastern flank and imperfect security services. While in this case the attackers say they were motivated by Kenya's involvement in the military effort to dislodge Al Shabab from Somalia, the lasting impression for most observers will be the savagery of killing men, women and children enjoying a weekend day out.
To be sure, some will disagree. Fox News ran a story yesterday citing "experts" as determining the rampage would lead to a surge in recruitment for Al Qaeda and aligned movements in the US, since it demonstrates a continued potency for terrorist tactics.
Those experts, I think, are going to be proven fortunately mistaken.
The nihilistic violence that Al Qaeda and aligned groups engage in has long been a major hindrance to recruitment for Al Qaeda. During the height of the war in Iraq, the penchant of Al Qaeda's local affiliate for murdering civilians at prayer, on the way to work, or out shopping for dinner, played a crucial role in stiffening the Iraqi public's resolve against the movement.
In 2005 Al Qaeda leader Ayman al-Zawahiri entreated the then leader of the movement in Iraq, Abu Musab al-Zarqawi, to leave off the wanton killing of civilians, saying it was undermining Al Qaeda's long term goals. He was ignored, and by 2007 Sunni Arab tribes that had been passively supportive of Al Qaeda fighters had turned on the movement.
The Westgate attack is precisely the sort of killing that Zawahiri, if his statements are anything to go by, understands hurts the movement. The death of one of the victims helps explain why.
Elif Yafuz, a Dutch woman who was 8 months pregnant, was gunned down when the attack began, along with her Australian partner Ross Langdon. I learned a little bit about them from friends on Facebook, who knew the couple from their time in Jakarta. Ms. Yafuz had devoted her adult life working on malaria and HIV eradication in Asia and Africa.
She received her Ph.D. from the Harvard School of Public Health earlier this year, with a dissertation that focused on malaria in eastern Africa, building off of fieldwork in Uganda. She and Mr. Langdon had recently returned to Africa, and she had started a job with the Clinton Foundation, focusing on malaria vaccine programs in Tanzania.
In sub-Saharan Africa, the mosquito-borne disease is one of the great killers of children. The US Center for Disease Control and Prevention estimates that malaria claimed 655,000 lives in 2010, 91 percent of those in sub-saharan Africa. Of those who died from the disease that year, an estimated 86 percent of the victims were children. As bad as that picture is, it's a big improvement from the middle of the last decade, with deaths down about 30 percent since then.
One of the reasons for that is the work of people like Yafuz. Former President Bill Clinton said in a statement on her death: "Elif devoted her life to helping others, particularly people in developing countries suffering from malaria and HIV/AIDS. She had originally worked with our Health Access Initiative during her doctoral studies, and we were so pleased that she had recently rejoined us as a senior vaccines researcher based in Tanzania. Elif was brilliant, dedicated, and deeply admired by her colleagues, who will miss her terribly."
Nairobi has become a regional hub for both aid workers and businessmen in eastern Africa, and if Al Shabab gets its way, the ability of those people to work and contribute to improving standards of living will grow harder and more dangerous. Less work would be done, and more children would die, if the Shabab gets its way. And that's the message sent by the attack.
While some people may find that a compelling message, they are thankfully few and far between. Will more attacks like the ongoing one in Nairobi follow? Certainly possible. But these are the acts of people striking, directly and indirectly, at the innocent and the weak. Such attacks do resonate - but they generate revulsion and horror.