STAFF NEWS & ANALYSIS
Bloomberg: Government Directs the Private Economy … Is There a Name for That?
By Staff News & Analysis - June 15, 2013

U.S. Agencies Said to Swap Data With Thousands of Firms … U.S. Intel Swapping Info to Thousands of Companies Thousands of technology, finance and manufacturing companies are working closely with U.S. national security agencies, providing sensitive information and in return receiving benefits that include access to classified intelligence, four people familiar with the process said. – Bloomberg

Dominant Social Theme: Thank these firms for all they do.

Free-Market Analysis: This Bloomberg article is a good example of an emergent dominant social theme … that private contractors work with the government for the good of the republic. The article actually quotes a top government man as saying this.

Our question is … what republic?

Was it the intent of the US founding fathers that an almost complete lack of outside threats should spawn a multi-trillion dollar military-industrial-intel complex that has as its apparent main goal the scooping up of every electronic communication of its citizens?

The idea of a republic was one in which the powers of government would be sparsely built from the wishes of the governed. Leaving aside any wishful thinking, that certainly is the not the case today.

The US is an empire not a republic and you can be sure the companies working under the thumb of Leviathan are not doing so purely out of patriotic motives.

Here's more from the Bloomberg article:

In addition to private communications, information about equipment specifications and data needed for the Internet to work much of which isn't subject to oversight because it doesn't involve private communications is valuable to intelligence, U.S. law-enforcement officials and the military. Microsoft Corp., the world's largest software company, provides intelligence agencies with information about bugs in its popular software before it publicly releases a fix, according to two people familiar with the process.

These programs, whose participants are known as trusted partners, extend far beyond what was revealed by Edward Snowden, a computer technician who did work for the National Security Agency. The role of private companies has come under intense scrutiny since his disclosure this month that the NSA is collecting millions of U.S. residents' telephone records and the computer communications of foreigners from Google Inc (GOOG). and other Internet companies under court order.

Many of these same Internet and telecommunications companies voluntarily provide U.S. intelligence organizations with additional data, such as equipment specifications, that don't involve private communications of their customers, the four people said. Makers of hardware and software, banks, Internet security providers, satellite telecommunications companies and many other companies also participate in the government programs. In some cases, the information gathered may be used not just to defend the nation but to help infiltrate computers of its adversaries.

Along with the NSA, the Central Intelligence Agency (0112917D), the Federal Bureau of Investigation and branches of the U.S. military have agreements with such companies to gather data that might seem innocuous but could be highly useful in the hands of U.S. intelligence or cyber warfare units, according to the people, who have either worked for the government or are in companies that have these accords. Microsoft Bugs Microsoft Corp. (MSFT), the world's largest software company, provides intelligence agencies with information about bugs in its popular software before it publicly releases a fix, according to two people familiar with the process.

… Most of the arrangements are so sensitive that only a handful of people in a company know of them, and they are sometimes brokered directly between chief executive officers and the heads of the U.S.'s major spy agencies, the people familiar with those programs said.

Michael Hayden, who formerly directed the National Security Agency and the CIA, described the attention paid to important company partners: "If I were the director and had a relationship with a company who was doing things that were not just directed by law but were also valuable to the defense of the Republic, I would go out of my way to thank them and give them a sense as to why this is necessary and useful." "You would keep it closely held within the company and there would be very few cleared individuals," Hayden said.

Cooperation between nine U.S. Internet companies and the NSA's Special Source Operations unit came to light along with a secret program called Prism. According to a slide deck provided by Snowden, the program gathers e-mails, videos, and other private data of foreign surveillance targets through arrangements that vary by company, overseen by a secret panel of judges.

Okay, all this is dressed up very nicely. Sounds like the majority of US companies involved are doing so because they want to make sure the government has the necessary tools to defend its citizens.

But the trouble with this, as we have long observed, is that these assumptions are based on 9/11 and there are plenty of question about what actually happened no 9/11. Thus, you have a multi-trillion dollar public/private spying enterprise justified by something that obviously didn't happen the way the US government claims it did.

An even larger issue is the reality of US government dominance over these private firms. When the private sector is so clearly subservient to the public sector, you do not have a republican or even democratic system anymore … you have a variant of a political system that we can probably call neo-fascism.

The idea that individual contractors are mostly offering their services out of patriotism is certainly questionable. Surely the monetary issues are paramount. And since many of these companies probably couldn't receive similar compensation working for anyone but the US government a further question arises: Are these companies in some sense quasi-public entities?

If one extends the reach of the US government beyond what is commonly held to be public enterprise, the US government instead of consuming and controlling a third of GDP, may be controlling up to half of it, or more.

After Thoughts

The Bloomberg article wants us to consider these developments in terms of patriotism. But it seems to us that the US government is simply too big, and is using the questionable elements of 9/11 to justify growing bigger still.

Posted in STAFF NEWS & ANALYSIS
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