VentureBeat — NCSC — WSJ — Prison Planet — Glenn Greenwald — Lawrence Summers Bio — Washington Post (Naomi Klein)
August 4, 2009 | Paul Boutin
…What’s not spelled out here is that implementing this vision would mean government regulation of at least some private sector resources, to force them to get with the program. That, the Journal reports, made Bush-era holdover Hathaway unpopular with Obama’s people.
It would be easy to deem Hathaway’s recommendations as a power grab. But no, her report recommends that the cybersecurity czar’s role be that of a coordinator and facilitator, rather than a policy-setter or regulator. Yet the report also concludes there’s no way for the government to shore up national IT defenses without more centralized authority and a singular mission statement for every public and private network.
More likely, the opposite will happen. Decentralized organization is practically a religion on the Internet. Regulation of private sector networks is something the Obama administration wants to avoid. That’s why the administration has been fussing over the final wording of the report since April.
Hathaway’s abrupt resignation probably signals her recognition that the whole concept of a cybersecurity czar was misguided. “The status quo is no longer acceptable,” said the executive summary of her report. “Leadership should be elevated and strongly anchored within the White House to provide direction, coordinate action, and achieve results.”
Instead, both the Bush and Obama administrations shoved cybersecurity down under layers of bureaucracy, and dithered on what actions to take…
National Cyber Security Center
The National Cyber Security Center (NCSC) is a newly formed office within the United States Department of Homeland Security (DHS) and is based on the requirements of National Security Presidential Directive 54/Homeland Security Presidential Directive 23 (NSPD-54/HSPD-23), reporting directly to DHS Secretary Janet Napolitano. The NCSC is tasked with protecting the U.S. Government’s communications networks. The Center will monitor, collect and share information on systems belonging to NSA, FBI, DoD, and DHS.
The first Director appointed to head the Center was Rod Beckstrom, a successful entrepreneur and co-author of The Starfish and the Spider. On March 5, 2009, Beckstrom tendered his resignation as the Director of National Cybersecurity Center. According to the Washington Post, Beckstrom resigned, “…due to a lack of resources and because there were efforts underway to fold his group — as well as the division Reitinger is joining — into a facility at the NSA.” On March 11, 2009, Phil Reitinger, currently “chief trustworthy infrastructure strategist” at Microsoft was appointed to the position.
The U.S. Government is under ever increasing cyber attacks; the task was to find someone that could tap into the best and brightest from the nation’s cyber and communications community to help stem the tide of attacks. The NCSC is reaching out to key individuals in the industry to create a think tank to better understand the magnitude of the challenges, as well as to rapidly develop solutions to counter these challenges.
Cyber Security Czar
Phil Reitinger, a Microsoft C-level executive, has been appointed but not confirmed to this position. This position is dual-hatted and reports to the National Security Council and the National Economic Council.
Mission – A National Security Priority
The NCSC has not officially published their mission; however, the Center’s priority is to protect the US Government’s computer and communication systems from domestic and foreign threats. The federal government has designated this as a National Security Priority, one of our highest national priorities.
By SIOBHAN GORMAN, August 4, 2009
WASHINGTON — The White House’s acting cybersecurity czar announced her resignation Monday, in a setback to the Obama administration’s efforts to better protect the computer networks critical to national security and the global economy.
The resignation highlights the difficulty the White House has had following through on its cybersecurity effort. President Barack Obama first outlined his cybersecurity plans in a high-profile speech May 29, announcing his intention to create a top White House cybersecurity post — a position he has yet to fill.
Melissa Hathaway, who completed the Obama administration’s cybersecurity review in April, said in an interview that she was leaving for personal reasons. “It’s time to pass the torch,” she said, adding that she and her colleagues have provided an “initial down payment for what’s needed to start to address cybersecurity.”
In the past year, intelligence officials have grown increasingly concerned about Chinese and Russian cyberspies surveilling U.S. infrastructure and military networks.
People familiar with the matter said Ms. Hathaway has been “spinning her wheels” in the White House, where the president’s economic advisers sought to marginalize her politically.
Cybersecurity is “a major priority for the president,” White House spokesman Nicholas Shapiro said, adding that the administration is “pursuing a new comprehensive approach to securing America’s digital infrastructure.” In the search to fill the top cyber post, “the president is personally committed to finding the right person for this job, and a rigorous selection process is well under way,” he said.
Ms. Hathaway had initially been considered a leading contender to fill the cyber post permanently. She lost favor with the president’s economic team after she said it should consider options for regulating some private-sector entities to ensure they secure their networks, said cybersecurity specialists familiar with the discussions. Being a holdover from the Bush administration didn’t help either, they said.
In February, the White House tapped Ms. Hathaway, a senior intelligence official who had launched President George W. Bush’s cybersecurity initiative, to lead a 60-day cybersecurity policy review. Ms. Hathaway completed her review in April, but the White House spent another 60 days debating the wording of her report and how to structure the White House cyber post. National Economic Adviser Larry Summers argued forcefully that his team should have a say in the work of the new cyber official.
The result was a cybersecurity official who would report both to the National Security Council and the National Economic Council. Supporters said that arrangement would cement cybersecurity as a critical security and economic issue; detractors said it would require the new official to please too many masters and would accomplish little.
Cybersecurity experts inside and outside the government heralded Mr. Obama’s May 29 speech, but since then, several people have turned down offers for the job.
“It’s almost like the system has become paralyzed,” said Tom Kellermann, a former World Bank cybersecurity official who served on a commission whose work influenced the White House’s cyber planning.
In recent weeks, new front-runners have emerged, including a former Clinton assistant defense secretary, Franklin Kramer, and Howard Schmidt, a former top security officer at eBay Inc. who has served on several presidential cybersecurity panels. Mr. Kramer didn’t respond to a request for comment, and Mr. Schmidt couldn’t respond because he was traveling, a spokeswoman said.
Ms. Hathaway said she took her name out of the running two weeks ago. “I finished what they asked me to do,” she said, noting she has set up and staffed the bulk of the cybersecurity office.
Jerry Mazza – Wednesday, May 27, 2009
On April 20, I wrote an article, Big Bro’s Cybersecurity ACT: A means to shut down the Internet. Lo and behold, yesterday, this article Obama Set to Create A Cybersecurity Czar With Broad Mandate appeared in the Washington Post.
The Post reported, “President Obama is expected to announce late this week that he will create a ‘cyber czar,’ a senior White House official who will have broad authority to develop strategy to protect the nation’s government-run and private computer networks, according to people who have been briefed on the plan.
“The adviser will have the most comprehensive mandate granted to such an official to date and will probably be a member of the National Security Council [italics mine] but will report to the national security adviser as well as the senior White House economic adviser [Larry Summers], said the sources, who spoke on the condition of anonymity because the deliberations are not final.”
“A White House official,” we are told, “said on Friday that cybersecurity “is vitally important, and the government needs to be coordinated on this.” Of course he/she spoke on condition of anonymity. The announcement meshes with “the long anticipated release of a 40-page report that evaluates the government’s Cybersecurity initiatives and policies. The report is intended to outline a ‘strategic vision’ and the range of issues the new adviser must handle, but it will not delve into details,” administration spinners told reporters last month.
Of course, not delving into details means not telling you what role the National Security Agency, America’s numero uno surveillance agency, will play in “protecting private-sector networks.” Also, think of “protecting” sort of as the Clean Air Act protected polluters and No Child Left behind left behind all the money to make it happen. “Protecting private-sector networks” is Washington-speak for dominating them.
The issue we are told is “a key concern in policy circles” and those “experts” tell us it “requires a full and open debate over legal authorities and the protection of citizens’ e-mails and phone calls.” The article continues, “The Bush administration’s secrecy in handling its Comprehensive National Cybersecurity Initiative, most of which was classified, hindered such a debate, so privacy advocates have said.”
I love the term “privacy advocates.” As opposed to what, voyeurs, spies, the guy who as I write, right now, is trying to manipulate my cursor, and impeded me earlier from downloading the WP article? By the way, my computer’s complete files were immaculately scrubbed of spyware last week. So, Big Brother, are you back already?
Again, The White House’s hand in all this will be to “oversee the process, formulate policy and coordinate agencies’ roles, and will not be operational,” the administration officials say. No, they’ll save the operational component for Israel’s Amdocs or some such company, or create a “national party line,” sort of like the old days when many people shared a telephone line, to, allegedly, save money.
And of course, Obama was briefed a week ago on this and signed on the dotted line for the creation of the new gig. Yet, as of Friday, “they” were still hashing out exactly what “rank and title” the “adviser” would have. Hey, these things matter. The thought is to name some person who can “pick up the phone and contact the president directly, if need be,” and most probably be taped.
This is all in keeping with Obama’s presidential campaign pledge “to elevate the issue of cybersecurity to a “top priority and to appoint a national cybersecurity adviser ‘who will report directly to me [Obama].” How quick these guys learn, especially elevating things to “top priority” like the war in Afghanistan and Pakistan, and keeping Iraq rolling, along with propping up the failing banks. But let’s not be cynical.
Having the old “Czar” report to both the national security and economic advisers shows that the White House is looking to insure “a balance between homeland security and economic concerns,” anonymous sources said. It also points out they’re trying to put out a fire [internal battle] in which Larry Summers, yup, the senior economic adviser, who is actually “pushing for the National Economic Council [his group] to have a major role in cybersecurity.” This is to “insure that efforts to protect private networks do not unduly threaten economic growth,” like of those Treasury-busting derivatives or any fancy money-laundering. What’s fair is fair in love and war. Right on! Move to the rear of the bus, please…
Lawrence Henry Summers (born November 30, 1954) is an American economist and the Director of the White House’s National Economic Council for President Barack Obama. Summers is the Charles W. Eliot University Professor at Harvard University’s Kennedy School of Government. He is the 1993 recipient of the John Bates Clark Medal for his work in several fields of economics and was Secretary of the Treasury for the last year and a half of the Clinton Administration.
Summers also served as the 27th President of Harvard University from 2001 to 2006. Summers resigned as Harvard’s president in the wake of a no-confidence vote by Harvard faculty that resulted in part from Summers’ conflict with Cornel West as well as a 2005 speech in which he suggested that women’s under-representation in the top levels of academia is due to a “different availability of aptitude at the high end.” Summers has also been criticized by some liberals for the centrist economic policies he advocated as Treasury Secretary and in later writings. Since returning to government in the Obama administration, he has come under fire for his numerous financial ties to Wall Street…
Service in the Clinton Administration
In 1993 Summers was appointed Undersecretary for International Affairs and later in the United States Department of the Treasury under the Clinton Administration. In 1995, he was promoted to Deputy Secretary of the Treasury under his long-time political mentor Robert Rubin. In 1999, he succeeded Rubin as Secretary of the Treasury.
Much of Summers’s tenure at the Treasury Department was focused on international economic issues. He was deeply involved in Clinton administration’s effort to bail out Mexico and Russia when those nations had currency crises. Summers encouraged then-Russian leader Boris Yeltsin to use the same “three-‘ations'” of policy he advocated in the Clinton Administration– “privatization, stabilization, and liberalization.”
Summers pressured the Korean government to raise its interest rates and balance its budget in the midst of a recession, policies criticized by Paul Krugman and Joseph Stiglitz. According to the book The Chastening, by Paul Blustein, during this crisis, Summers, along with Paul Wolfowitz, pushed for regime change in Indonesia.
As Treasury Secretary, Summers led the Clinton Administration’s opposition to tax cuts proposed by the Republican Congress in 1999. Also during his stint in the Clinton Administration, Summers was successful in pushing for capital gains tax cuts. During the California energy crisis of 2000, then-Treasury Secretary Summers teamed with Alan Greenspan and Enron executive Kenneth Lay to lecture California Governor Gray Davis on the causes of the crisis, explaining that the problem was excessive government regulation. Under the advice of Kenneth Lay, Summers urged Davis to relax California’s environmental standards in order to reassure the markets.
Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act): “Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” Summers said. “This historic legislation will better enable American companies to compete in the new economy.” Many critics, including President Barack Obama, have suggested the 2007 subprime mortgage financial crisis was caused by the partial repeal of the 1933 Glass-Steagall Act…
Losses on financial derivatives
During Summers’ presidency at Harvard, the University entered into a series totalling US$3.52 billion of interest rate swaps, financial derivatives that can be used for either hedging or speculation.By late 2008, those positions had lost approximately $1 billion in value. This forced Harvard to borrow significant sums in distressed market conditions to meet margin calls on the swaps. The decision to enter into the swap positions has been attributed to Summers and has been termed a “massive interest-rate gamble” that ended badly…
National Economic Council
In 2009, he was tapped by President Obama to be the director of the White House National Economic Council. He has emerged as a key economic decision-maker in the Obama administration, where he has attracted both praise and criticism. There has been friction between Summers and former Federal Reserve Chairman Paul Volcker, as Volcker has accused Summers of delaying the effort to organize a panel of outside economic advisers, and has cut Volcker out of White House meetings and has not shown interest in collaborating on policy solutions to the current economic crisis. On the other hand, Obama himself was reportedly thrilled with the work Summers did in his first few weeks on the job. And Peter Orzag, another top economic advisor, calls Summers “one of the world’s most brilliant economists.”
In January 2009, as the Obama Administration tried to pass an economic stimulus spending bill, Oregon Democratic Representative Peter DeFazio criticized Summers, saying that he thought that President Barack Obama is “ill-advised by Larry Summers. Larry Summers hates infrastructure.” . DeFazio, along with liberal economists including Paul Krugman and Joseph Stiglitz, has argued that more of the stimulus should be spent on infrastructure, while Summers has supported tax cuts.
Summers has recently come under fire for accepting perks from Citigroup, including free rides on its corporate jet last summer. According to the Wall Street Journal, Larry Summers called Chris Dodd asking him to remove caps on executive pay at firms which have received stimulus money, including Citigroup.
On April 3, 2009 Summers came under renewed criticism after it was disclosed that he was paid millions of dollars the previous year by companies which he now has influence over as a public servant. He earned $5 million from the hedge fund D. E. Shaw, and collected $2.7 million in speaking fees from Wall Street companies that received government bailout money…
White House officials yesterday released their personal financial disclosure forms, and included in the millions of dollars which top Obama economics adviser Larry Summers made from Wall Street in 2008 is this detail:
Lawrence H. Summers, one of President Obama’s top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . .
Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.
That’s $135,000 paid by Goldman Sachs to Summers — for a one-day visit. And the payment was made at a time — in April, 2008 — when everyone assumed that the next President would either be Barack Obama or Hillary Clinton and that Larry Summers would therefore become exactly what he now is: the most influential financial official in the U.S. Government (and the $45,000 Merrill Lynch payment came 8 days after Obama’s election). Goldman would not be able to make a one-day $135,000 payment to Summers now that he is Obama’s top economics adviser, but doing so a few months beforehand was obviously something about which neither parties felt any compunction. It’s basically an advanced bribe. And it’s paying off in spades. And none of it seemed to bother Obama in the slightest when he first strongly considered naming Summers as Treasury Secretary and then named him his top economics adviser instead (thereby avoiding the need for Senate confirmation), knowing that Summers would exert great influence in determining who benefited from the government’s response to the financial crisis…
LARRY Summers, President Obama‘s chief economic adviser who conked out in public at two high-profile events earlier this year, did it again, our sources said. Summers nodded off at an economic summit in February and at a meeting with credit card industry officials in the White House in April.
Photos of him dozing so embarrassed Obama, he quipped at the White House Correspondents dinner, “Larry Summers needs his sleep.” Now, our insider reports, “Larry fell asleep last week during a private meeting with the president. Thank God, no reporters were there.” A rep for the White House declined to comment. NY Post
I vote to banish Larry Summers. Not from the planet. That wouldn’t be nice. Just from public life.
The criticisms of President Obama’s chief economic adviser are well known. He’s too close to Wall Street. And he’s a frightful bully, of both people and countries. Still, we’re told we shouldn’t care about such minor infractions. Why? Because Summers is brilliant, and the world needs his big brain.
And this brings us to a central and often overlooked cause of the global financial crisis: Brain Bubbles. This is the process wherein the intelligence of an inarguably intelligent person is inflated and valued beyond all reason, creating a dangerous accumulation of unhedged risk. Larry Summers is the biggest Brain Bubble we’ve got.
Brain Bubbles start with an innocuous “whiz kid” moniker in undergrad, which later escalates to “wunderkind.” Next comes the requisite foray as an economic adviser to a small crisis-wracked country, where the kid is declared a “savior.” By 30, our Bubble Boy is tenured and officially a “genius.” By 40, he’s a “guru,” by 50 an “oracle.” After a few drinks: “messiah.”
The superhuman powers bestowed upon these men — and yes, they are all men — shield them from the scrutiny that might have prevented the current crisis. Alan Greenspan’s Brain Bubble allowed him to put the economy at great risk: When he made no sense, people assumed that it was their own fault. Brain Bubbles also formed the key argument Greenspan and Summers used to explain why lawmakers couldn’t regulate the derivatives market: The wizards on Wall Street were too brilliant, their models too complex, for mere mortals to understand.
Back in 1991, Summers argued that the subject of economics was no longer up for debate: The answers had all been found by men like him. “The laws of economics are like the laws of engineering,” he said. “One set of laws works everywhere.” Summers subsequently laid out those laws as the three “-ations”: privatization, stabilization and liberalization. Some “kinds of ideas,” he explained a few years later in a PBS interview, have already become too “passé” for discussion. Like “the idea that a huge spending program is the way to stimulate the economy.”
And that’s the problem with Larry. For all his appeals to absolute truths, he has been spectacularly wrong again and again. He was wrong about not regulating derivatives. Wrong when he helped kill Depression-era banking laws, turning banks into too-big-to-fail welfare monsters. And as he helps devise ever more complex tricks and spends ever more taxpayer dollars to keep the financial casino running, he remains wrong today.
Word is that Summers’s current post may be a pit stop on the way to the big prize, Federal Reserve chairman. That means he could actually make “maestro.”
Mr. President, please: Pop this bubble before it’s too late.
Naomi Klein is the author of “The Shock Doctrine: The Rise of Disaster Capitalism.”
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