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Friday, December 30, 2005

The Boom That Wasn’t

The economy has little to show for $860 billion in tax cuts.
By Lee Price
Economic Policy Institute
December 21, 2005

Since 2001 President Bush and congressional leaders have promised that enacting each of a series of tax cuts would strengthen the economy by bringing faster growth, more jobs, and greater investment. With Congress again debating whether to extend past tax cuts and enact new ones, its time to review how much the last four years of tax cuts have affected the U.S. economy and budget outlook. Unfortunately for most Americans, the tax cuts since 2001 have not made todayҒs economy stronger. Over the last five fiscal years, the tax cuts have had a direct cost of $860 billion and (with interest costs) a total effect on the deficit of $929 billion. By creating excessive permanent deficits, they have lowered our future standard of living.

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FULL REPORT

Posted by Elvis on 12/30/05 •
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Democracy Hollowed Out Part 2

The Internet is big business and the greatest thing for freedom of speech and communication.  There’s little doubt in my mind, the powers that influence this country’s policies are out to censor it.

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By Andy Dornan
IT Architect

When the F.C.C. announced it would deny independent ISPs access to the phone companies’ wires as of August this year, commissioners claimed that their decision would somehow improve competition. In the small print, it was clear they didn’t believe their own spin. Recognizing the threat that the newly enthroned monopolies posed to customers, the FTC adopted a statement of principles that said ISPs shouldn’t block access to lawful Internet content, services, or applications.

The statement is one small piece of good news. It means SBC and Verizon can’t firewall off competitive VoIP services (as North Carolina phone company Madison River Communications tried to do with Skype) or censor their critics (as Canadian phone company Telus did during a labor dispute). But it applies only to the Internet side of the link.

A greater threat is that ISPs may try to restrict the customer’s side by denying access to machines based on their hardware or software configuration. And far from banning that, the government may be encouraging it. Back when he was head of cybersecurity, White House terrorism advisor Richard Clarke even said it should be made mandatory to quarantine malware.

It seemed crazy at the time, but the required technologies are now becoming available. Vendors call them by different names, but all use an agent on the client to verify its configuration. If the agent reports software (or in more advanced versions, hardware) that isn’t on a white list, access is denied.

Access control agents have two big practical problems on a private network, both of which are more serious on the wider Internet: Not all clients can run the agents, and new programs not yet certified malware-free won’t be on the white list. Worse, ISPs might base their lists on commercial considerations. So while custom enterprise applications are locked out, Sony’s rootkit gets through.

I asked some of the key players in the Trusted Computing Group (TCG), which is standardizing agent hardware and protocols, whether abuse by ISPs was likely. Their answers were mixed. Brian Berger, chair of the TCG’s marketing group, says ISPs might want to use them to offer value-added services. Critics fear that in the future “added value” could mean access to anything beyond a small subsection of the Internet.

Most of the hardware standards are driven by Intel, whose official position on how they’re used is not to have one. Ned Smith, Intel’s representative on the TCG and co-chair of its infrastructure group, says what people do with the technology is up to the free market. Given the current state of competition in the market for DSL connections and PC OSs, this isn’t very reassuring.

Oddly, the one truly reassuring voice is from Microsoft. According to Chief Privacy Officer Peter Cullen, Microsoft is against ISPs doing anything that would restrict customers’ choice of software. And he says this isn’t just about the impracticability of demanding that data centers patch everything on the second Tuesday of the month. Laptop and home users also have the right to run an insecure PC. Supposedly it’s a principled stand for freedom and privacy.

Not everyone will see it that way. The most cynical explanation is that Microsoft is really taking a stand for poor-quality software. After all, Outlook and Internet Explorer would be the first victims of any ISP or law that banned insecure computing.

I’m not quite that cynical. Microsoft could just be jealous that Cisco Systems’ access control agents are actually shipping while its are still vaporware, or it could be trying to emphasize the benefits of locally installed software over Google’s centralized architecture. But mostly I think the giant understands its monopoly is more fragile than the telcos’ or the cable companies.’ Unlike them, Microsoft didn’t just erect tollbooths on taxpayer-funded infrastructure. It had to give customers some semblance of what they wanted, and that isn’t to be quarantined.

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Democracy Hollowed Out
PART 1 - PART 2 - PART 3 - PART 4 - PART 5
PART 6 - PART 7 - PART 8 - PART 9 - PART 10
PART 11 - PART 12 - PART 13 - PART 14 - PART 15
PART 16 - PART 17 - PART 18

Posted by Elvis on 12/30/05 •
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Thursday, December 29, 2005

US Propaganda - CAN SPAM

Anyone who hates spam also hates the CAN-SPAM ACT OF 2003. Its core opt-out policy doomed it for failure. It superseded stronger state laws, made it impossible for individual lawsuits, and provided woefully inadequate penalties when applied in the court. And worse, by following a few simple rules, it literally made spam ... er ... “unsolicited commercial e-mail” legal.

Propaganda isn’t just for dictatorships anymore. Following on the heels of the recent revelation that the U.S. GOVERNMENT PLANTED upbeat, pro-American articles in Iraqi newspapers comes another episode of propaganda, this time a little closer to home.

This week the Federal Trade Commission released a report to Congress championing the CAN-SPAM Act of 2003.

The summary of the 116 page report was more cautious than some of the pages deeper in, where the lines drawn between CAN-SPAM’s enactment and a reduction in spam volume and consumer annoyance with spam were presented dangerously close to cause and effect.

Everything I’ve heard and seen written about CAN-SPAM has been quite the opposite of what the FTC claimed this week. Many others feel the same.

The report isn’t necessarily all lies, but it does seem to be propagandist and self serving in its love for CAN-SPAM. The report calls CAN-SPAM “effective” on a number of levels in shielding consumers from spam. It even calls the roundly criticized opt-out provisions effective.

The report does acknowledge that anti-spam technologies have become “more effective and more broadly deployed” in the same two-year time frame as CAN-SPAM’s existence, but it gives far too much credit to CAN-SPAM for the gains against spam since 2003.

The report says that the volume of spam is “leveling off.” This may be true, depending on who you talk to. Anti-spam technology vendor MX Logic has reported that 68 percent of e-mail traffic it scanned in 2005 was spam, down from 77 percent in 2004.

But another anti-spam vendor, Postini, reported a higher number: currently 88 percent of the 500 million messages it processes each day are junk. That number is up from 85 percent in the fourth quarter of last year.

According to Andrew Lockhart, Postini’s Senior Director of Marketing, less spam is getting into email inboxes, but “no one should misunderstand that less spam is being sent,” he said.

The lower rate of spam is due to spam protection at the ISP and corporate level, he said.

“The percentage of what’s out there being total garbage is increasing,” Lockhart said. “The CAN-SPAM act is not why people are receiving less spam. The reason why is that [anti-spam] technology is being deployed.”

Michael Osterman, president of Osterman Research, agreed with the FTC’s findings that the percentage of spam is indeed going down, but he doesn’t credit CAN-SPAM.

“The CAN-SPAM law, in my opinion, has had virtually no impact on the reduction in the percentage of spam,” he said.

Rather than legislation, the more difficult work of changing the economics of spam through technology, is where real gains against spam are being seen, he said.

Strides are being made using reputation analysis to stop spam at the connection level, he said.

“If you can stop 99 percent of spam, spammers either have to crank up volume 100 times or they have to get out of business,” he said.

Furthermore, in its report the FTC claims that “compliance with CAN-SPAM by top online marketers is high” This fact, combined with technological advances, show “there is reason to believe that legislation and technology together are helping to solve the spam problem,” the report states.

No, not true.

According to MX Logic and numbers quoted by Osterman, only 4 percent of unsolicited commercial e-mail complied with CAN-SPAM in 2005.

CAN-SPAM is a good law to have on the books, allowing prosecution of the few spammers caught and giving legitimate marketers publicly agreed upon rules to follow.

But don’t give CAN-SPAM credit for reducing spam or for less consumer irritation. My email inbox is barraged with a lot less spam than two years ago but I give credit to anti-spam technology not CAN-SPAM.

Let’s go back to Dec 2003 - when the CAN SPAM Act was signed into law:
- The CAN SPAM Act took precedence over more stringent State-level anti-spam laws.
- The CAN SPAM Act does not remediate the common practice of circumventing anti-spam laws by sending spam e-mails through an offshore ISP.
- The FTC was not a supporter of the CAN SPAM Act. The FTC supported a different bill (International Consumer Protection Enforcement Act [ICPEA]), which gave the commission greater power in tracking down spammers. (See http://news.com.com/FTC+seeks+broad+powers+to+fight+spam/2100-1028_3-1015517.html?tag=nl).

The CAN SPAM Act has not affected the volume of e-mail spam being sent. The average consumer and enterprise user sees less spam in 2005 because
- The majority of enterprises and ISPs have installed spam-filtering technology
- Spam-filtering technology is more sophisticated
- Security vendors have bundled spam filtering within broader security applications
- Spam filtering capabilities have been built into the latest releases of e-mail servers (e.g., Exchange and Domino) and e-mail clients (e.g., Outlook, Notes and Eudora).

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Posted by Elvis on 12/29/05 •
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FBI Hiring IT Staff

The FBI recently launched a recruitment campaign aimed at hiring a large number of Information Technology (IT) Professionals. These candidates will work with some of the most cutting-edge technology available in the world, to operate and maintain a robust, secure FBI global information technology (IT) infrastructure environment. 

The FBI is seeking highly competitive candidates to fill critical IT positions, including computer scientists, computer engineers, information technology specialists, and IT project managers. Salaries for these positions range from $35,452 - $135,136, based on experience and qualifications, with potential recruitment bonuses for those candidates who possess skills deemed most critical to the FBI. To expedite the hiring and interviewing process, special procedures will be in place to bring applicants onboard expeditiously, with interviews beginning in January 2006.

FBI Director Robert S. Mueller III said, “Joining the FBI technology team will be an exciting and rewarding career. FBI is dedicated to developing and implementing state-of-the-art information technology systems to support our agents and analysts working in the field. These IT positions are critical in support of this FBI’s mission to protect the United States against terrorism, foreign intelligence, criminal enterprises and cyber attacks.”

The FBI is strengthening systems engineering as this critical discipline is necessary to tie new systems together architecturally and ensure that newly identified standards are enforced. System engineers are needed to develop and operate in a test environment so that stress and other tests are run against new systems. Engineers are needed to transition new capability into an operations and maintenance environment.

Another critical area for the FBI is data warehousing and federated search. Warehousing has been very successful, yet enterprise extraction, translation, and loading processes must be fine tuned. Data engineers are needed to model legacy databases for federated search and participate in legacy transition planning.

Finally, the FBI is on a path to service oriented architecture. The services offered in the future will cross intelligence, administrative, and law enforcement lines of business. Application engineers and experts in portal technology will be needed to create this new environment. Many of these efforts are in their infancy and offer new personnel the opportunity to get in on the ground floor in systems development.

All interested personnel should immediately apply online at [url=http://www.fbijobs.gov]http://www.fbijobs.gov[/url]. As a prerequisite for FBI employment, you must be a U.S. citizen and consent to a complete background investigation, drug test, and polygraph. Only those candidates determined to be best qualified will be contacted to proceed in the selection process.

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Posted by Elvis on 12/29/05 •
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Transit Strike Reflects Nationwide Pension Woes

By Steven Greenhouse
NY Times
December 24, 2005

Fast-rising PENSION COSTS FOR GOVERNMENT EMPLOYEES - the issue that helped set off this week’s transit strike in New York City - are a problem confronting cities, counties and states nationwide, causing many budgetary experts to predict a wave of painful fights over efforts to scale back government retirement programs.

Many officials and fiscal experts assert that across the nation government pension plans face a shortfall of hundreds of billions of dollars. From New Jersey to California, government officials say that attempts - either through contract fights, legislation or public referendums - to limit the amount of money that states and cities contribute to pensions are inevitable and overdue. Labor unions, for their part, say that the worries are overblown.

“Every level of government in New York City, New York State and in states across the country face large and growing pension obligations,” said E. J. McMahon, a budget expert at the Manhattan Institute, a conservative research group. “If nothing is done to bring pensions under control, all the other headaches that state governments will be facing in the next 20 years on needs like education and health will be enormously worse.”

The CONTRACT BATTLE FOR NEW YOUR’S TRANSIT WORKERS, which has yet to be fully resolved, underscores the anger and risks that await governments as they seek to win concessions to cut their pension costs.

The strike, which lasted 60 hours and shut down the country’s largest mass transit system, began when the union representing 33,700 bus and subway workers rejected efforts by the Metropolitan Transportation Authority, a state agency, to increase either the retirement age for future employees or the amount they contribute to finance their pensions.

But it is now possible - even after the strike ended - that the transit union may succeed in getting the authority to take all or some of its pension demands off the table as the two sides seek to put the final touches on an overall settlement.

With New Jersey facing a $25 billion shortfall in its pension obligations, a state advisory commission recently urged that the retirement age for government employees, other than police, firefighters and judges, be raised to 60 from 55.

And in California, Gov. Arnold Schwarzenegger faced a storm of criticism after he proposed replacing the traditional pension plan for government employees with a far less generous plan resembling 401(k)s. He ultimately backed down even as budget watchdogs complained that many police officers retired with pensions equaling 90 percent of their annual earnings.

Many GOVERNMENT employees and their unions assert that the campaign to trim pensions threatens America’s social contract for the middle class: a respectable pension.

Saying that in recent contracts they had sacrificed wage increases or better health benefits for solid pensions, many public employees and their unions assert that governments are betraying their commitments by seeking to now cut pensions. Further, they argue that much of the shortfall in pension financing could be erased by a strong stock market in the next several years.

“A lot of people are exaggerating the size of the problem,” said Gerald McEntee of the American Federation of State, County and Municipal Employees, which represents 1.4 million government workers. “Right-wing think tanks and conservative Republicans want to do away with traditional pension plans and replace them with much-cheaper 401(k)’s at the same time they want to give all these tax cuts to the rich.”

The fight over public-sector pensions follows a movement to cut private sector pensions. In recent years, corporation after corporation has complained about what they assert are the onerous costs of pensions.

Bethlehem Steel, United Airlines and other companies, saying they could no longer afford it, have stopped paying into their pension plans, forcing the government to step in and absorb billions of dollars in costs. And now Delphi, the giant auto parts company that filed for bankruptcy in October, is threatening to do the same thing.

Meanwhile, some companies, Hewlett Packard among them, have replaced their traditional pension plans with 401(k) plans.

Many courts have ruled that cutting the pensions of current public employees - as opposed to future ones - violates the Constitution, which prohibits governments from breaching contracts. As a result, taxpayers must pay for full pensions promised to government employees.

When private companies go bankrupt and leave badly underfinanced plans, a federal agency, the Pension Benefit Guaranty Corporation, steps in to insure the workers’ pensions, although many workers end up getting smaller pensions than their companies had promised. The agency is running a $23 billion deficit this year and many policy makers fear that its liabilities could mushroom if many more large corporations file for bankruptcy and dump their pension obligations on the government.

In New York’s transit dispute, the transportation authority, which runs the city’s subways and buses, was alarmed that the pension costs for the transit workers had tripled since 2002, to $453 million this year.

To control soaring pensions costs, the authority at first demanded raising the retirement age for future employees to 62. Workers can now retire at age 55, after 25 years on the job, and receive pensions equal to half their earnings. They average $55,000 a year, including overtime.

After the union, Local 100 of the Transport Workers Union, resisted that demand, the authority made a new proposal, that future transit workers pay 6 percent of their wages toward their pensions, compared with 2 percent for current workers.

The transportation authority is working closely with Gov. George E. Pataki and Mayor Michael R. Bloomberg, who say it is vital to trim fast-rising pension outlays for state and city workers because they threaten the government’s ability to provide education, policing and other basic services. New York City’s annual pension outlays are expected to jump to nearly $5 billion in 2008, more than double the level in 2004.

Mayor Bloomberg repeatedly called the strikers greedy. “The public says, ‘I don’t want to pay more taxes and I don’t get these kind of benefits,’ “ he said yesterday. “You have no idea how many e-mails I got, ‘I don’t make that kind of money. I don’t have those kinds of pension benefits. Why are people striking?’ “

But Roger Toussaint, the president of the transit workers’ union, said the walkout was aimed at stopping an employer offensive nationwide to cut pensions and other benefits. He said the transportation authority was mimicking corporate America.

“What you have here is a scandalous attempt on the part of the M.T.A. to jump on the bandwagon,” he said.

Nationwide, 90 percent of public-sector workers have traditional benefit plans - known as defined-benefit plans because retirees receive a defined amount each month- while just 20 percent of private-sector workers do. In 1960, 40 percent of private-sector workers were in traditional pension plans. One reason for the disparity: 36.4 percent of government employees belong to unions while just 7.9 percent of private-sector workers do.

“The transit strike will undoubtedly draw attention to the issue,” said Harry Katz, dean of the Cornell University School of Industrial and Labor Relations. “The message is, ‘Look, we have to worry about the long-run cost of pensions in the public sector as well as the private sector.’ “

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Posted by Elvis on 12/29/05 •
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