Uncle Sam Is Choking on Data

by Gary North

Recently by Gary North: Illegal Aliens and Unemployment: Causes and Effects

At the end of this report, I will provide a link to an article I published on steps that you can take to keep Web-based data-gathering companies from collecting data on your Web viewing activities.

You cannot stop this altogether. Too much data comes from your financial transactions. The FBI and other intelligence agencies are now buying data from private firms. In effect, they are outsourcing data-collection.

YOUR FORMER RIGHT TO PRIVACY

We know that privacy is no longer a right. The Supreme Court in 1973 legalized abortion based on the supposed Constitutional right to privacy. But the invasion of privacy by Big Brother is so all-encompassing today that whatever right to privacy existed in 1973 is missing in action today.

The federal government can track all of our bank-related transfers of money. These are digital, and digits are easy to trace. Only when we pull money out of an ATM does the government cease being able to follow the money. This is why national governments around the world limit the denominational size of bills, despite price inflation. They want to make it less convenient to use paper money. Paper money does not leave a paper trail. Digital money does. Professor Joseph Salerno of Pace University has identified this motivation.

Despite this enormous depreciation, the Federal Reserve has steadfastly refused to issue notes of larger denomination. This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government. The purpose of its ongoing breach of long-established laws regarding financial privacy is to make it easier to monitor the economic affairs and abrogate the financial privacy of its citizens, ostensibly to secure their safety from Colombian drug lords, Al Qaeda operatives, and tax cheats and other nefarious white-collar criminals.

There is no way to hide digital money. There are few ways to hide digital information at all. The average American does not bother to try to hide.

The very rich use the legal system to protect their interests. They make it so difficult for governments to interfere with their activities that bureaucrats prefer to go for the low-hanging fruit: small businesses, upper middle-class taxpayers, and similar targets who offer the bureaucrats a high conviction/collection rate per investigation. The bureaucrats want scalps. Middle class ones will do just fine.

DIGITS ARE CHEAP TO COLLECT

The economist's law of demand is this: "When the price of something falls, more will be demanded." This surely includes digitized data. The cost for companies and governments to collect data is falling exponentially. The demand is for more data. This is mammon in action: the god of "more."

Recently, the Obama Administration authorized a change in the rules. It now allows the government's National Counterterrorism Center to keep information on Americans for five years. The old limit was six months. The organization was founded in 2004 to coordinate information from the various intelligence agencies: CIA, FBI, Pentagon, and the NSA.

The PBS News Hour ran a segment on this administrative change. It noted this following: "Left unclear is the kinds of information on Americans that is being collected, retained, and analyzed now, and how widely commercial data, like travel records, credit card transactions, and phone calls, is involved." Whenever things are left unclear this is because government bureaucrats prefer it this way. They have fewer written restraints on their activities.

THE FT. HOOD SHOOTINGS

The justification for this expansion is the inability of the government to identify the 2009 Ft. Hood mass murders by a Muslim Army officer. We can understand how difficult this was. As Secretary of Defense Gates said, the military did not give enough attention to the problem of "workplace violence."

The Department of Defense Independent Review Related to Fort Hood, ordered by Defense Secretary Robert Gates, is limited in scope. Despite the title of its report – Protecting the Force: Lessons from Fort Hood – there is only a single page dedicated to the chapter called "Oversight of the Alleged Perpetrator." Much more space is given to military personnel policies (11 pages), force protection (six pages) and the emergency response to the shootings (12 pages).

The Wikipedia article on the Ft. Hood shootings offers this summary. The shooter was in contact with Anwar al-Awlaki, who was killed by a U.S. drone in 2011.

Hasan has expressed admiration for the teachings of Anwar al-Awlaki, imam at the Dar al-Hijrah mosque between 2000 and 2002. As Al-Awlaki was under surveillance, Hasan was investigated by the FBI after intelligence agencies intercepted 18 emails between them between December 2008 and June 2009. In one, Hasan wrote: "I can't wait to join you" in the afterlife. . . .

Army employees were informed of the contacts, but no threat was perceived; the emails were judged to be consistent with mental health research about Muslims in the armed services. A DC-based joint terrorism task force operating under the FBI was notified, and the information reviewed by one of its Defense Criminal Investigative Service employees, who concluded there was not sufficient information for a larger investigation. Despite two Defense Department investigators on two joint task forces having looked into Hasan's communications, higher-ups at the Department of Defense stated they were not notified before the incident of such investigations.

So, because of Ft. Hood, the government has opened the door to five-year data storage on all Americans. In other words, there was insufficient data available to the intelligence community to identify a looming problem. The solution? Monitor everyone more closely.

The phrase "intelligence community" is an oxymoron. It is comparable to "military justice." By the way, the shooter is still alive. He has not yet been tried. On February 2, 2012 a military judge ruled that Hasan will stand trial on June 12, 2012. The delay in the trial is "purely a matter of necessity of adequate time for pretrial preparation." Meanwhile, Hasan continues to receive paychecks and medical expenses are paid by the military.

WARRANTLESS EAVESDROPPING

James Bamford wrote a definitive book on the National Security Agency. He was interviewed by PBS. He had this to say about the plan to extend the period of data storage to five years. He pointed out that this was attempted before, The Total Information Program, the infamous TIA.

There was an organization that came up with this idea of collecting every piece of information, putting it all together. And most of that was private information on U.S. citizens. And then somehow, from all that, we would be able to find these terrorists. Well, the public was outraged by that idea and Congress was outraged by it, and they quickly disbanded the Total Information Awareness program. And the more we keep going down this road, the more we keep coming back to that same concept.

I just finished a cover story for Wired magazine this month where we look at this very, very large data center that's being built in Utah for the National Security Agency and for other agencies also. It's going to be one million square feet. It will probably hold a yottabyte of information, which is almost indescribable in terms of the number of pages. I think it's a quintillion – 500 quintillion pages of documents. You get to the point where you're saying there's just too much collection, and the analysis just has to go on with the information it has.

For your information, a yottabyte is a quadrillion gigabytes.

The government's spokesman said that the government intends to be discreet in what it gathers. It will not gather everything.

Bamford had this response. He began with a little-known fact: the FBI buys data from private data firms.

Yes, probably it's legal to do that, but we saw in the Bush administration how for years they went on conducting illegal surveillance, and then lying to the public about what was going on. President Bush came out and said we were doing no warrantless eavesdropping, when in fact we were doing a massive amount of warrantless eavesdropping. The amount of information the government collects I think is a problem. It's a problem because it affects the privacy, Fourth Amendment rights of U.S. citizens. And I think the government is drowning in information. I think that is one of the problems. It isn't able to find the terrorists because there's too much information, not too little information.

So, it is not merely that government agencies collect data. All private American data base collection firms are now fair game.

DATA, YES; INTELLIGENCE, NO

The magnitude of the data is beyond comprehension – anyone's comprehension. This is the meaning of "comprehend": to get your mind around something.

Computer programs can accumulate data. The government uses many programs. There is no universal computer or program inside the U.S. government. The data are not coordinated.

The programs cannot think. They can only respond. The programmer has to build in connections. The program is always limited by the abilities of a handful of programmers. Too many programmers spoil the digital soup.

The federal government is drowning in data now. The decision-makers have the ability to ask certain kinds of questions. But they cannot possibly handle the amount of specific information that has been computerized.

The ability of the government to make connections regarding terrorists is minimal. Someone within the bureaucracy has to be willing to say: "He's the man." He has to be Adrian Monk. He has to piece together the separate bits and bytes. This takes the following:

Incentive (promotion)
Asking the right questions
Finding the correct data
Drawing conclusions
Putting your next promotion on the line
Going to your superior
Who will go to his superior
Who will go to his superior.
Who will decide there's too much risk

With respect to taxes, the IRS may decide it's worth the risk to pursue someone. With the IRS, you are guilty until proven innocent. But it still takes time and personnel to bring a case to a conclusion.

Any agency can create havoc for an individual. It has the resources. But why bother? Who is this person? A nobody? No promotion there. A somebody? He has lawyers who are smarter than government lawyers. So, it must be someone in between: easy victories.

The point is this: despite enormous quantities of data, it still takes wisdom and courage by bureaucrats to make the system work. Both are in short supply in government.

The more suspects they have, the greater the size of the haystack. The needle may be easy to identify, but he will not be easy to convict.

It takes bureaucratic resources to get a conviction. Agencies have administrative law judges, meaning judges employed by the agencies. They are not independent. But a decision by an ALJ can be appealed to an independent court.

The more data the agencies have, the longer it will take to force anyone with real money to do anything. If the U.S. Army cannot bring the Ft. Hood shooter to trial after 18 months, you know the system is jammed already.

CONCLUSION

Noise is your friend. The more data the government collects, the more noise exists between you and an agency that seeks convictions.

If millions of other people are part of the noise, and you opt out, that works to your advantage.

Most people will not bother to opt out.

You can get off the lists of the largest data-collection sites. Just click here to get started.

To surf outside of Google's data-gathering, use this.

April 4, 2012

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

Copyright © 2012 Gary North

The Best of Gary North