Behind every great fortune is a great crime, said French novelist Honoré de Balzac. What crime lies behind Booz Allen Hamilton?
More on that in a moment…
The Dow fell -116 points yesterday. Gold fell $9 an ounce. Still no clarity in the markets. Still no resolution. The unstoppable force of more and more credit is still bearing down on the immoveable object of excess debt.
Ben Bernanke is pushing for higher stock prices… higher consumer prices… and higher bond prices. Mr. Market still hasn't expressed himself clearly.
Mr. Market will have the last say. He always does. But he can hold his tongue for a very long time.
In the meantime, investors, planners and ordinary households can make big mistakes. And sometimes, they have a keener interest in seeing those mistakes continue than in correcting them. From The Economist:
How serious is the terrorist threat that justifies the National Security Agency's surveillance of Americans? Edward Snowden, the NSA leaker, doesn't address this question; his point is that the American people should have the information they need to decide whether the threat merits the surveillance.
Matthew Yglesias thinks the threat isn't very serious, and that counterterrorism efforts, including surveillance and airport security systems, should be subjected to a cost-benefit analysis. ("Approximately zero lives per year are saved by airport security measures," he writes, though he admits he could be wrong about this.)
Stephen Walt is a bit less hyperbolic, but he agrees that terrorism simply isn't the kind of danger that could merit the level of response America devotes to it. Unless terrorists get nuclear weapons, he says, they really can't do much damage in America:
Conventional terrorism – even of the sort suffered on 9/11 – is not a serious threat to the U.S. economy, the American way of life, or even the personal security of the overwhelming majority of Americans, because al Qaeda and its cousins are neither powerful nor skillful enough to do as much damage as they might like.
He adds that "post-9/11 terrorist plots have been mostly lame and inept, and Americans are at far greater risk from car accidents, bathtub mishaps, and a host of other undramatic dangers than they are from 'jihadi terrorism.'" He uses the Boston bombing in April as a case in point, describing it as tragic but less lethal than the factory explosion that took place that same week down in Texas.
Mr. Yglesias and Mr. Walt are right: conventional terrorism poses no major threat to America or to its citizens. But that's not really what it aims to do. Terrorism is basically a political communications strategy. […]
In a perfect world, as Mr Walt argues, we in the public wouldn't let terrorist strikes dictate our politics. But we're not likely to get calmer about terrorism, because too many people are trying to keep us frantic.
At least three parties stand to gain from exaggerating, rather than minimizing, our reactions to terrorist strikes. The first is the media, which wins viewership by whipping up anxiety over terrorist strikes. The second is politicians seeking partisan advantage, since panic over foreign-backed terrorism tends to increase voter turnout. […]
Finally, the third party trying to exacerbate our responses to terrorist attacks are the terrorists themselves, who have generally proven quite effective at choosing targets that provoke widespread media coverage.
The Economist is forgetting consultancy firm Booz Allen! Yes, dear reader, he left out the main supporters of the terrorist fantasy: the zombies. The New York Times reports:
Edward J. Snowden's [the NSA whistleblower] employer, Booz Allen Hamilton, has become one of the largest and most profitable corporations in the United States almost exclusively by serving a single client: the government of the United States.
Over the last decade, much of the company's growth has come from selling expertise, technology and manpower to the National Security Agency and other federal intelligence agencies. Booz Allen earned $1.3 billion, 23% of the company's total revenue, from intelligence work during its most recent fiscal year.
The government has sharply increased spending on high-tech intelligence gathering since 2001, and both the Bush and Obama administrations have chosen to rely on private contractors like Booz Allen for much of the resulting work.
Thousands of people formerly employed by the government, and still approved to deal with classified information, now do essentially the same work for private companies. Mr. Snowden, who revealed on Sunday that he provided the recent leak of national security documents, is among them.
As evidence of the company's close relationship with government, the Obama administration's chief intelligence official, James R. Clapper Jr., is a former Booz Allen executive. The official who held that post in the Bush administration, John M. McConnell, now works for Booz Allen.
Nice Work If You Can Get It
Pretty good gig, no?
Booz Allen earned $1.3 billion pretending to protect approximately nobody from a mostly non-existent threat. What it was actually doing was helping the feds snoop on the law-abiding people who pay the bills.
The company shareholders get rich. Its executives get rich. Ex-public servants walk through the revolving door into the company's plush offices… and they get rich too. What's not to like? And who's going to oppose more anti-terrorism spending?
But wait, there's more! From colleague Louis Basenese:
[T]otally lost among the Snowden headlines yesterday − the Pentagon just announced a new cyber security budget. It calls for $23 billion in spending through 2018.
That includes cyber terrorism spending of $4.6 billion in the next fiscal year − up 18% on the $3.9 billion allocated this fiscal year.
In fiscal 2015, the spending rises yet again − to $4.7 billion!
Who gets that money? No doubt, Booz Allen will get a big chunk of it.