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Tuesday, 28 June 2011

The new anarchists - Are Hackers The 21st Century’s First Revolutionary Movement?






Hackers’ efforts to fight the power may lead to a backlash


Peter Steiner’s now famous cartoon for the New Yorker, “On the Internet, nobody knows you’re a dog,” first appeared in 1993 but didn’t, according to the artist, receive much attention until the Internet became more familiar to people. It was a rare instance of a cartoon doing what it’s not supposed to do, gaining relevance over time as people understand just how pithily it captured an essential truth. This, surely, elevates it to one of the most important cartoons in history (Steiner told the New York Times in 2000 that he felt a little like the person who invented the smiley face).

History has shown Steiner’s vision to be much too benign, and the cyber events of the past year — hacking and theft on the scale of 18th-century piracy — demand an update, perhaps along the lines of, “On the Internet, no one knows you’re China.” But even that may have been spoiled after the events of this week, which saw the appearance of an alliance between two groups of clandestine hackers, Anonymous and LulzSec, both of which have been implicated in numerous high profile security breaches.

In a statement announcing “Operation Anti-Security,” LulzSec declared that “the government and white hat security terrorists across the world continue to dominate and control our Internet ocean … we encourage any vessel, large or small, to open fire on any government or agency that crosses their path.”



This was accompanied by “an open letter to citizens of the United States of America” on Anonymous’ news site, which sounded uncannily tea party-ish in its call on Americans to “wake up” and take back their liberties from a corrupt government.

To judge from the reaction of some information security experts, the alliance was on the scale of Germany teaming up with Japan during World War II. Except by the end of the week, LulzSec was apparently calling it quits, alarmed, perhaps, by the arrest of an alleged member in Britain and the attempts by other hackers to expose their identities.

With subterfuge as the name of the info-war game, the virtual equivalent of smoke and mirrors makes it difficult to say what’s true and what might be misdirection, especially with organizations that are leaderless and decentralized. But here’s the upshot of this recent cycle of cyber shenanigans: On the Internet, one person’s freedom fighter is another’s terrorist.

Technological prowess has given hackers an extraordinary sense of political entitlement. It’s easy to theorize about how the world should work if your only engagement with it is through a computer and you’re in your teens or 20s. But weaponize your theories through hacking and you’re all but certain to lose the public, who will demand ever more stringent crackdowns and restrictive laws that, in turn, will push some hackers to even more extreme responses.

At the same time, the hacker collectives do possess a technological prowess that is beyond the imagining of most people, and with a deep understanding of how technology works, there is the privilege of insight. The explosive development of the Web raises serious, complex questions about ownership, privacy and freedom. And if these are ignored by politicians, or dominated by commercial interests, or dismissed by a mainstream media averse to complexity, then hacker frustrations will turn to direct action as a way of getting attention.

This is, after all, what non-governmental organizations and other advocacy groups do on a much more limited scale to promote their interests. (Still, it’s one thing to disrupt traffic with a protest march; it’s another to disrupt Internet traffic with a denial-of-service attack.)

The question is what kind of politics is this technology empowering? If you don’t acknowledge genuine concerns or even good faith in the info security community, if government is irredeemably corrupt, then you haven’t just abandoned politics, you’re anti-political; all that’s left is a war of attrition.

Oddly, the most useful insights on hacker culture may come from a re-engagement with the politics of anarchism, as noted in a review of new books on the subject in the summer issue of BookForum by Columbia historian Mark Mazower. While Mazower makes a mistake, in my view, in seeing revolutionary politics as still being mediated through academic leftism rather than through technology, his point — that the anarchist theories of the 19th century are more relevant than Marx to explain the present political conditions — is timely.

Anarchism’s combination of individual commitment, ethical universalism and deep suspicion of the state as a political actor mark it out as the ideology of our times,” writes Mazower, before ending his piece with the claim that “we are all anarchists now.”

But we’re not. We are disenfranchised because today’s anarchism belongs to the hackers — and they have the means to make much better bombs. Whether the alliance between LulzSec and Anonymous was ever real or not, it defines the new ideological reality of our times: the network as an emerging anarchic state actor. Whether we like it or not, this politics of technology forces us toward libertarianism, to maximal freedom, because the alternatives — anarchy and control — are dancing toward disaster.

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Monday, 27 June 2011

U.S. Debt Default Might Have ‘Catastrophic’ !






Pacific Investment Management Co. LLC Chief Executive Officer Mohamed El-Erian said a short-term default by the U.S. on its debt might have “catastrophic” legal consequences.


“We would be in the land of the unpredictable” if lawmakers fail to reach an agreement to raise the $14.3 trillion debt ceiling and the U.S. misses a payment “simply because of the technical linkages,” El-Erian said in an interview on CNN’s “Fareed Zakaria GPS” program, scheduled to air today.

U.S. lawmakers are seeking a path to increasing the debt limit and to cutting at least $1 trillion from the long-term deficit before an Aug. 2 deadline. President Barack Obama plans to hold separate meetings at the White House June 27 with Senate leaders Nevada Democrat Harry Reid and Kentucky Republican Mitch McConnell in an effort to break an impasse that scuttled a seven-week negotiating effort led by Vice President Joe Biden.

“My advice is please try and get together and solve this issue in the context of a medium-term reform package,” El-Erian said.

“If you can’t do that and you’re going to kick the can down the road, kick the can rather than face something that could be catastrophic in terms of legal contracts being triggered.”



Pimco, the world’s biggest manager of bond funds, sees more value in non-U.S. government bonds than U.S. Treasuries as the Federal Reserve prepares to end its $600 billion bond-repurchase program this month, El-Erian said. Pimco, of Newport Beach, California, is a unit of the Munich-based insurer Allianz SE. (ALV)
 
“A basic rule as an investor is don’t buy something unless you know who else is going to be buying,” he said. “So when we look at Treasuries, we see the big buyer stepping away from the market, for certain. And we ask the question, who else is going to be buying at these levels, and we can’t identify another buyer of the size of the Fed.”

El-Erian said the U.S. fiscal problems are dwarfed by those of Greece, whose debt reached 143 percent of gross domestic product last year.

“It is inevitable that Greece would have to restructure its debt,” he said. “Greece has two problems: it has too much debt and it cannot grow. And until these problems are solved, more and more of Europe is going to become contaminated.”

Europe has been treating Greece “not as a solvency issue, but as a liquidity problem,” El-Erian said. “We had a massive bailout a year ago in Greece, massive. A year later, every single indicator in Greece is worse off.”

-- With assistance from Heidi Przybyla, Julianna Goldman, Cheyenne Hopkins and Ian Katz in Washington. Editors: Ann Hughey, Christian Thompson.

Sunday, 26 June 2011

Technology can work both ways, problems and solutions





Contradictheory By Dzof Azmi

TECHNOLOGY is about making things easy. You want to send a message, click – that’s it. You want to download a song, click, click, click. A bit more difficult, but that’s it. You want to attack a website – well, that’s several clicks away, too.

In fact, attacking a website is now as easy as downloading a script and clicking on it. During the recent cyber attacks on 51 Malaysian Government websites, it was suggested that most of them were victims of such “script kiddies”.

The raids on the government websites were said to be in response to the blocking of 10 file-sharing sites on the Internet. The Malaysian Communications and Multimedia Commission (MCMC), which blocked the websites, alleged that it did so because the websites were violating the Copyright Act. They made available content which had been copied without permission, for download for free.

I have written on the subject of downloading content for free from the Internet before. My conclusion then was that if it’s Malaysian entertainment content, it is good if more people can access it as easily as possible.

Admittedly, if you have to do so by breaking the law, that is another thing altogether.

Yet, I believe the steps taken by the MCMC in response to pleas by copyright content owners is a misstep. If you are trying to prevent piracy, trying to block the hosepipe that is the Internet drop by drop is not likely to succeed.

It’s a problem of supply and demand. For music, movies and TV shows, the demand for cheap or free access is high. As a result people will resort to many difficult things, including paying RM150 a month for Internet access and learning how to download content for free. Well, as I said, the Internet makes the difficult easy.

The reasoning behind blocking the websites is that it will stem supply. However, because the Internet is intrinsically designed to provide access that’s as easy and reliable as possible to content that resides on it, blocking one website will only lead people to look for another. And blocking 10 will result in 10 others taking their place.



Even if you could block all the websites, the open nature of the Net will most probably result in alternative routes. There was a time when file-sharing programmes such as Kazaa and Napster ruled the wires. When they were unceremoniously blocked and banned, people just moved on to alternatives.

The problem is that the demand is too high. So, instead of restricting supply, perhaps we should just admit the real solution lies in satisfying demand.

Although it’s a rather simplistic way of looking at the problem, this paradigm shift has proven to succeed in another, seemingly unrelated field – the war on drugs.

In the late 1980s, Switzerland’s problem with drugs was similar to that in many other countries in the world. The problem extended beyond the existence of addicts; it brought with it additional crime, be it in the form of drug pushers who looked to sell their goods illegally, or users who burgled to pay for their addiction.

This prompted the Swiss Government to embark on an aggressive programme against drugs. But instead of just trying to lock up more drug dealers, they also looked at the users. In particular, they realised that not all addicts responded well to treatment, and that their demand for “hard” drugs would remain.

So, the Swiss did the next best thing – they tried to reduce demand of illegal drugs by prescribing heroin.

In 1994, the Medical Prescription of Narcotics Programme set up clinics around Switzerland and identified hard-core users, who were then given injections of pharmaceutical-quality heroin daily, combined with medical, psychiatric, and social monitoring.

For this, the addicts paid 15 Swiss Francs or approximately US$8.50 (RM26.30) per day.

After three years, not only were participants’ health more stable, the use of illicit heroin and cocaine had dropped. And, they were more likely to have a home and get a job. Income from illegal activities dropped from 69% to 10%, and the number of offenders and offences decreased by about 60% in the first six months of treatment.

A 2004 World Health Organisation report concluded that for every dollar invested in the programme, US$12 (RM36) was saved on law enforcement, judicial and health costs. The programme is recognised to be so successful that in a 2008 referendum more than 68% of Swiss voters chose to keep it.

How does this work for illegal downloads? I’m not suggesting we have free cinemas for hard-core download addicts, but I believe that if you make it easier and cheaper to access legitimate content, it will reduce the number of illegal downloads. In short, satisfy the demand and people will not abuse the supply.

Right now, Malaysian-made movies are available almost on-demand via products like Astro First and HyppTV. For only RM15 you can watch a movie that has premiered relatively recently.

It’s a low price, but still not low enough to deter piracy. The good news is that I think the price can go down further.

In the United States, a company called Netflix allows people to view all the movies they like, whenever they want, at US$7.99 (RM24) a month. Not only is their selection wider than what our local providers are offering, the cost also works out to be lower in the long run if you are a serious movie addict.

At the end of the day, technology is just a tool that can work both ways. Instead of just using it to make it hard for lawbreakers to commit crimes, shouldn’t we also make it easy for law-abiders to get what they want?

Logic is the antithesis of emotion but mathematician-turned-scriptwriter Dzof Azmi’s theory is that people need both to make sense of life’s vagaries and contradictions.

Malaysia's Anwar walking a tightrope! He should resign honourablely?





ANALYSIS By BARADAN KUPPUSAMY

Despite expert evidence that Datuk Seri Anwar Ibrahim is the man in the controversial video screened by the Datuk T trio, the Opposition Leader shows no resolve to step down and maintains he is not the person in the film.

IS this the end of the road for PKR leader Datuk Seri Anwar Ibrahim?

The trial of the Datuk T trio former Malacca chief minister Tan Sri Abdul Rahim Thamby Chik, businessman Datuk Shazryl Eskay Abdullah and former Perkasa treasurer-general Datuk Shuaib Lazim has ended with a fine and something of a hero status for them.

They pleaded guilty to screening the video to selected journalists and editors at the Carcosa Sri Negara on March 21 and were each fined between RM1,000 and RM3,000.



But for Anwar, it is the start of another nightmare as he fights off this latest sex scandal which implicates him with a woman who is probably a Chinese sex worker at an Ampang apartment in February.

Sex scandals implicating Anwar have become all too familiar in recent years and denials and allegations of conspiracy by him and those around the Opposition Leader are equally familiar.

But while enumerating the facts of the case at the proceedings on Friday, deputy public prosecutor Kamaludin Md Said and defence lawyer for Rahim, Datuk Seri Muhammad Shafee Abdullah, quoted evidence from a report by experts that makes it difficult for a quick denial acceptable to the people.

The report from two leading US experts on forensics video/computer analysis Prof Hany Farid and Prof Lorenzo Torresani, both of Dartmouth College said the video was genuine, not tampered with and that the man in the video was 99.99% probably Anwar.

Then, there is the playing of the recording in court, which makes the video a public document and therefore, freely available to the public from now.

The question raised by DAP adviser Lim Kit Siang on the veracity of the experts was also unchallenged in court.

Hany Farid is accepted as the “father of digital image forensic/video analysis” and his testimony cannot be easily questioned.
He is frequently consulted for his opinions by newspapers, journals and courts. In 2009, he did an analysis of a famous photograph of Lee Harvey Oswald, the man who shot US president John Kennedy, holding a rifle and a newspaper and concluded the image was genuine.

In addition, he and Torresani are from Dartmouth College, one of nine Ivy League institutions in the United States founded in 1769 (before the birth of America in 1776), which employ the highest standards of learning and teaching in the world.

The police did a thorough job of getting a premier college in the United States to check on the authenticity of the video clip.

It is amazing that they (the police) could get the two professors involved to analyse the video. Their (the experts') involvement and that of Dartmouth College is why the case has been delayed this long.

But back to the question, is this end of the road for Anwar? Can he overcome this accusation?

Already some independent MPs, those who once backed Anwar, are demanding he resigns as MP.

They cited examples of MPs who had resigned in Turkey, Indonesia and the United States in recent weeks in the wake of sex scandals or sexual impropriety.

Anwar shows no resolve to step down. Instead, he is in fighting mode and rejects all calls for him to call it a day.

He also maintains he is not the man in the video. “We will deal with it. We will have to prepare our defence,” Anwar said to the possibility of being charged with making a false police report.

With mounting evidence of his sexual escapades and with the men close to him scraping the bottom of the barrel to find ways to support their leader, Anwar is still throwing at his enemies the same old charges to fend off their (the opponents') attacks.

As Prime Minister Datuk Seri Najib Tun Razak said, the people have to decide on the veracity of the video clip.

“This is something they have to judge for themselves. The most important thing is to determine the authenticity (of the tape) and find the truth,” he said.

“Two foreign experts have verified the video clip as authentic,” he said.

Considering that Anwar has denied he is the man in the video against mounting US evidence that the probability of him is 99.99% and considering that his Pakatan Rakyat colleagues are in deep denial, it is left for Parliament to censure its leader of the opposition.



Anwar should do the honourable thing and resign from office

THE STAR SAYS

MULTIPLE expert analyses have now identified Datuk Seri Anwar Ibrahim as the man in the sex video.
But his unlikely resignation from public office will remain unlikely, since public interest here is easily shunted aside.

Earlier, a local video professional and a Korean expert had also pronounced the video as genuine and undoctored.

Now Prof Hany Farid and Asst Prof Lorenzo Torresani of Dartmouth College in New Hampshire concur with those findings. Dartmouth is a top-notch Ivy League institution and among the most distinguished educational establishments in the world.

Prof Farid himself, a leading researcher and chair of Dartmouth's Neukom Institute for Computational Science, had even developed some of the latest techniques of video analysis.

All the available evidence and all the best forensic science now point overwhelmingly to Anwar.

Farid and Torresani's findings are said to be of “99.99%” certainty because to be 100% certain, a witness would have to be in the room at the time. That person is Datuk Shazryl Eskay Abdullah, who never had any doubts who was with him in the room.

But none of this will suffice for those who would insist on argument by denial.

A familiar combination of denial, spin and protestation would junk key witness testimony and top forensic analyses.

Reasonable people now know the truth, however much those with desperate political ambitions may deny and distort it.

PKR's partners in DAP and PAS must also know what they are unable to bring themselves to acknowledge publicly.

Adultery or even patronising a prostitute may not seem such a great crime. However, the stakes multiply for a Muslim leader, particularly one with an Islamist background who is aiming for the highest public office in the land.

PAS had earlier said it might have to review its Pakatan partnership with PKR if Anwar is the man in the video. Since there is no longer any reasonable doubt that he is, PAS now has to do the honourable thing as a reputedly forthright party with vaunted moral values.

But if nothing changes within PKR or Pakatan, that should also be no surprise.

In politics, doing what is honourable can often be difficult, especially for those who like to accuse their opponents of all kinds of intrigue and plots.

Saturday, 25 June 2011

To Repay or Not to Repay Debts?





Jean Pisani-Ferry

BRUSSELS – For months now, a fight over sovereign-debt restructuring has been raging between those who insist that Greece must continue to honor its signature and those for whom the country’s debt should be partly canceled.

As is often the case in Europe, the crossfire of contradictory official and non-official statements has been throwing markets into turmoil. Confusion abounds; clarity is needed.

The first question is whether Greece is still solvent. This is harder to judge than is the solvency of a firm, because a sovereign state possesses the power to tax. In theory, all that is needed in order to get out of debt is to increase taxes and cut spending.

But the power to tax is not limitless. A government determined to honor its debts at any cost often ends up imposing a tax burden that is disproportionate to the level of services that it supplies; at a certain point, this discrepancy becomes socially and politically unsustainable.

Even if the Greek government were to succeed shortly in stabilizing its debt ratio (soon to reach 150% of GDP), it would be at too high a level to convince creditors to continue lending. Greece will need to reduce its debt ratio considerably before it can return to the capital markets, which implies – even under an optimistic scenario – creating a primary surplus in excess of eight percentage points of GDP. Among advanced-country governments, none (except oil-rich Norway) has managed to achieve a durable primary budget surplus (revenue less non-interest expenditure) exceeding 6% of GDP.



This is too much for a democratic country, especially one where the tax burden is very unequally shared. Greece is, in fact, insolvent.

The second question is how serious a problem it is not to repay one’s debts.

One camp notes that, for decades, no advanced country has dared to do this, and that is why these countries still enjoy a positive reputation. If just one member of the eurozone embarked on the debt-default path, all the rest would immediately come under suspicion. In any case, according to this view, contracts simply must be respected, whatever the cost.

On the other side are those who call for the creditors who triggered the excessive debt to be punished for their imprudence. Lenders must suffer losses, so that they price sovereign risk more accurately in the future and make reckless governments pay higher interest rates.

Both lines of argument are valid, but the fact is that countries that have restructured their debt have not found themselves worse off as a result.

On the contrary, far from being banished from bond markets, they have generally bounced back quickly: investors like a sinner who returns to solvency better than a paragon of virtue on the verge of suffocation.

Twenty years ago, Poland negotiated a reduction in its debt and came off better than Hungary, which was keen to protect its reputation. Debt reduction is not fatal.

The third question is whether a Greek default would be a financial catastrophe – and when it should take place. Two channels are at work, one internal and one external.

First, government bonds are the reference asset for banks and insurers, because they are easily tradable and ensure liquidity. Obviously, any doubt about the value of such bonds could cause turmoil. The Greek banking system’s solvency and access to refinancing would be hit severely.

Externally, in turn, other European banks would be affected. But more importantly, other debt-distressed countries – at least Ireland, Portugal, and Spain – would be vulnerable to financial contagion.

So this is a dire situation. But it does not explain the European Central Bank’s attitude. The central bank has motives to be concerned. But instead of trying to find a way to cushion the possible impact of such a shock, the ECB is rejecting out of hand any sort of restructuring.

Indeed, it is raising the specter of a chain reaction by invoking the collapse of Lehman Brothers in September 2008, and threatening to punish any restructuring by cutting banks’ access to liquidity.

But if Greece is not solvent, either the EU must assume its debts or the risk will hang over it like a sword of Damocles. By refusing a planned and orderly restructuring, the eurozone is exposing itself to the risk of a messy default.

Europe, however, is not obliged to choose between catastrophe and mutualization of debt. The best route – admittedly a narrow road – is initially to beef up the financing program for Greece, which cannot finance itself on the market, while at the same time ensuring through moral suasion that private creditors do not withdraw too easily.

This is what is being attempted at the moment. But this breathing space must be used for more than simply buying time.

It should be used, first, to allow other distressed countries to regain or consolidate their financial credibility, and, second, to pave the way for an orderly restructuring of Greek debt, which requires preparation. Gaining time makes sense only if it helps to solve the problem, rather than prolonging the suffering.

Jean Pisani-Ferry is Director of Bruegel, an international economics think tank, Professor of Economics at
Université Paris-Dauphine, and a member of the French Prime Minister’s Council of Economic Analysis.