Category Archives: Government

Government Mass Surveillance Will Create a Surge in Technology Spend

How the NSA hacked Google in one simple graphic. Photograph: Washington Post

The Guardian has a presentation called The NSA Files that is the most brilliant rich media presentation of a complex subject I have ever come across outside of a museum. So go read it, even if it is just to see the presentation.

As technology races ahead, from time to time public debate and the law of the land must catch up to it. Government surveillance is one of the most important technology issues of our times. In the US, the NSA files have already had a profound impact on the perceptions of Americans about surveillance and civil liberties. Outside the US, Germany is aghast that the US and UK, NATO allies would spy on Angela Merkel and Germany. On the other hand, there is some evidence that the NSA has aided in combating Mexican drug cartels and prevented terrorism.

The political issues surrounding mass electronic surveillance are complex and do not lend themselves to quick fixes. The issues at stake involve civil liberties, anti-terrorism efforts and international spying, among other things. It might take a decade of public education and wrangling in courts, legislative bodies, NATO and perhaps even the UN, before policy, practice and the law around surveillance settles down.

Leaving aside the political issues, the NSA files will feed a long surge in surveillance and anti-surveillance technology. Snowden’s leaked files are like the Trinity test – the first detonation of a nuclear bomb. Prior to that governments knew that a nuclear bomb was feasible and some were feverishly working on making one, but the public did not really know much about it. The Trinity test, first brought the power and potential horror of a nuclear bomb to the attention of people around the world. And just like Trinity set off a nuclear arms race that lasted for decades, the NSA files will set off a “Snoop Brawl” which will lead to a burst of technology spending around the world. But unlike the nuclear arms race, which was a race principally between nations, this Snoop Brawl is going to be multi-faceted; many players and many fist fights.

Country vs Country
Countries now realize, if they hadn’t actually known it all this while, that the NSA gives the US almost unfettered access to their secrets – those of their governments, politicians and companies. Dilma Roussef, Petrobras, Ban Ki-moon and Angela Merkel were all targets of the NSA; none of which can be justified by national defense. Surveillance is not a single-purpose (e.g. protect the country against terrorism) tool. It is an arsenal of weaponry to project a country’s power and further its interests. And no country has a bigger arsenal than the NSA.

Not China for sure. A few months back, China was pilloried for not doing enough to stop Chinese hackers, allegedly sponsored by the Red Army. That doesn’t seem so egregious anymore. If all major countries decide to bolster their electronic espionage and counter-espionage capabilities, that itself is going to be a lot of hardware, software and thousands of tech jobs.

Country vs Citizens
The NSA collectes metadata on all phone calls in the country – who called whom, when and from where. It is easy to see how this data could be very useful in tracking the networks involved in illegal activity. Or political opponents. If information is power, this is the hammer of Thor (Thor 2 was so-so by the way). Which country that isn’t shackled by its laws, can pass up the opportunity to gather this data?

Outside of a few advanced democracies with active civil liberties protection groups, there is no countervailing force to stop a government from collecting and using this data. The only hurdle is the technology and skills to mine a massive data set like this. Which money can buy. Expect countries to spend a lot on this and other Big Brother technology.

While this gives the government a valuable instrument to catch the bad guys, the very same instrument, in the wrong hands could be used to suppress democracy itself. Or give more power to despots. Expect big orders from tin pot dictatorships as well as big nations where ruling classes are trying to quell democracy.

Companies vs Governments
The US is a hub for internet companies and cloud companies that carry the private data of people and businesses around the world. Much of this data travels through pipes in the US or sits in databases controlled by US companies. Courtesy of Snowden now the world knows that US companies have been cooperating with the NSA with no disclosure to the customers.

European and other advanced nations are likely to enact laws that prevent companies like Google and Apple from becoming listening posts for the US. They may require these companies to “fragment their clouds” and keep the data of their, say, German customers in Germany with restrictions on who can this data be shared with.

On the other hand, companies like Google will have to work hard to regain the trust of their customers. Google is already taking measures to prevent the NSA from eavesdropping without them knowing. Apple is making noises that they might challenge the legality of not allowing them to disclose when information has been shared with the government at their request.

Companies vs Companies
The other things that all companies will realize – not just cloud companies with user data – is that their IP is not safe. In the past year, the Chinese hacking incidents being reported have already raised awareness of this issue. But what the NSA files make clear is that ethics and national interest seem to have no intersection at all. Every country may be spying on foreign companies that can bring value to leading companies in that country. Protection of IP and confidential information will become a key concern for companies. Much more than it is today.

Consumers vs Companies and Governments
Consumers are going to increasingly want to know how their communication and confidential information is protected by online services. Now that they know that “Enemy of the State” is for real what steps should they take to protect themselves? Encryption and information security are complex technical issues which most people don’t understand or even care about. Perhaps there is a need for “information security rating agencies” that rate online services on how they protect users’ confidential data – from hackers and governments everywhere. Perhaps people will increasingly want to roll-their-own email rather than use Gmail or Yahoo mail.

Like the nuclear arms race, the Snoop Brawl will create a flood of spending from both governments and companies. And exactly like the nuclear arms race, it leaves no positive impact on the human condition.

In Which Basab Gets UIDed

A couple of weeks back, I was in the Infosys Bhubaneswar offices. On Friday, which was my last day at work before my vacation, UID enrollment was going on on campus. SBI, one of the agencies entrusted to enroll people into Aadhar was going to be at Infosys for a week.

I decided that I must get enrolled. There would never be a better chance. And so I did. But it took me two trips and 3 hours.

UID or Aadhaar as it is called is India’s unique identification project. It is a massive, in fact the biggest, biometric identification program anywhere in the world. It is quite different from programs like the US Social Security programs or any country’s passport or driving license programs. It’s sole focus is on unique, infallible biometric identification. It does not have any benefit or purpose associated with it. Rather, it is designed such that any benefits program (like the Public Distribution System) or regulatory purpose (id of bank account owners) may use the Aadhaar infrastructure.

It will be cheap, fast and near infallible. Say you walk up to a bank to open an account. You fill up a form that states your name, UID number and maybe even father’s name and address. Then, you peer into a lens that scans your iris and sends its data and the data from the form to the UID system. The UID system simply sends a Yes or a No – Yes this person, whose iris you scanned, is who he claims to be (name, father’s name etc.). The system will never send back your name, father’s name etc. Just a yay or a nay. Clever.

Actually, it is clever in other ways too. By avoiding a direct connection with any benefits program, it entirely avoids the politics surrounding any benefits program. Also, the government plans to run only those parts of the system itself that it absolutely must. The rest is being outsourced. So we will hopefully not build up a huge bureaucracy to run Aadhar, just a small one.

The original team that worked on the UID project had many team members (and its program manager, Raj Mashruwala) who came from tech companies in the Bay Area. I attended a talk and panel discussion about UID by some of them at Google in Mountain View a few months ago.

Most Indians are cynical about corruption and so a common refrain you will hear about Aadhaar is that politicians and bureaucrats will never let it succeed because it will make leakages in benefits programs so rare. One of the panelists at the event was an ex-IAS officer, now entrepreneur. He said that pols and bureaucrats, especially the ones in New Delhi, won’t mind at all if petty corruption of the kind you find in PDS and NREG went away. In fact, pols might want to take credit for eliminating this most visible form of corruption. The big bucks are anyway in scams like the 2G scam, where UID has no role to play.

So anyway, back to my own odyssey to get enrolled in Aadhaar. At 5pm on Friday, I wound up my work and went and stood in line. There were probably 15 people in front of me. A form was handed out, which I filled out, but not after having to ask for help. Why is there a “Relationship” field after “Father’s Name”? It may not have been this exactly, but there were a few totally befuddling fields to enter.

The line was moving really, really slowly. When my turn came, it was close to 645pm. And then I discovered why.

There were two stations. At the first station, the form you had filled out, was entered into an application on a computer. The trouble was that they (Aadhar or SBI, I don’t know who) needed the fields to be populated in both English and Oriya.

Now typing in Oriya using a QWERTY keyboard needs special skills and a special keyboard. The next best thing is to type in English and transliterate. The enrollment application used Google Translate’s transliteration service. Which is pretty nifty, but only in the hands of a trained operator. The woman at the first station was, shall we say, less trained. As a result, the Oriya part of the form was taking forever.

Eventually, I had to ask her to step aside and let me do it. I can’t read Oriya. So I would type in Roman, transliterate and then she would tell me if it was OK or not. We made some progress. But even with this arrangement, something like “R. K. Puram” proved extremely difficult.

Just after 7pm I got done with the data entry. Now onwards to station 2. Station 2 was for finger printing, iris scan and a photograph. But just my luck. As soon as I sat down, the network connection just disappeared. The operator couldn’t pull my record from Station 1.

The operator tried various things, which to me looked like a variety of paths to reach the same file folder on the other computer which was no longer connected. Then he would jiggle some wires and try the same series of things again.

Doing the same thing again and again and expecting different results is called insanity. Or a random number generator. Windows is somewhere between the two. Sometimes it actually produces results. So I let him keep trying for 5 minutes before I asked him to call his supervisor.

He called (not phone called, just called out loud). The man was getting a cold coffee at the coffee station across the hall. He got back with his drink in another 5 mins.

He tried the same thing a couple of times. But not for too long. He seemed to have had some experience with the mysterious ways of Windows. He rebooted. Another 7 minutes.

Now, finally, the operator had my record. The iris scan was a snap. Next was the finger printing. No problem. And then, what should have been the easiest thing, taking a photograph with webcam, didn’t work. And finally, that’s when I gave up.

I had a scheduled call at 730pm. I left at 725pm, disappointed. I wasted 2.5 hrs of my life and had nothing to show for it.

People say that the profit motive automatically brings in efficiency. This was a clear example of how that is often giving credit where credit is not due. SBI is enrolling people into Aadhaar because it has a vast network and great reach which positions it well to profit from the exercise.

But I doubt if SBI is making money at this. Their costs per day per enrollment center are fixed. They probably get paid per enrollment. But if enrollment is this slow, how can they turn a profit? Simple things like investing a little bit in training, better software and a wireless network instead of wires going all over the place could easily increase throughput. But apparently it hasn’t occurred to them yet.

I also didn’t understand why Aadhaar requires information from enrollees in both English and the local language. Couldn’t it be in one or the other?

Anyway, my story ends on a positive note. I went in to the office on Monday evening just for this. Somebody had already confirmed that my record still existed. All I had to do is get my biometrics recorded. I did and now I am enrolled in Aadhaar.

Investment Hates Uncertainty, Especially in the Law


A couple of unconnected things are throwing dark shadows over this dream run that Foreign Direct Investment into the Indian economy has been having. One, the Income Tax department’s claim on Vodafone for $2.5 B related to its acquisition of a controlling stake in Hutchison Essar. Two, the Andhra government’s crusade against the microfinance industry.

In both cases, the governments (central and Andhra) have good reason to act as they are. In the Vodafone case, there are grey areas when it comes to one offshore entity selling off a stake in an Indian company to another offshore entity. The microfinance industry has been charging rates on loans which become debt traps for poor villagers. Perhaps some regulation is in order.

But the way this is being done creates problems. When you change the rules of the game after investments have been made, future investors worry about making investments. FDI is the good sort of investment. It doesn’t turn tail and run when the markets are down. But if we are to encourage it, we have to take the regulatory uncertainty out.

The Problem With Being Unsure

Felix Salmon writes about Helen Thomas having to quit her job after she said some nasty stuff on camera

Thomas gave voice to an opinion which she then, almost immediately, retracted; no one, in the subsequent debate, defended the substance of her remarks. She was wrong; everybody, including Thomas, agrees on that point, and no real harm was done to anyone but Thomas when the video of her remarks surfaced.

But if you turn out to be wrong, even temporarily, even only once, on a hot-button issue, that’s enough for effective excommunication from polite society. That, to me, is chilling: I’d much rather live in a world where people should be able to change their minds and should be allowed to be wrong on occasion. For surely we are all wrong, much more often than we like to think.

He then points to something Tyler Cowen said on bloggingheads.tv

Take whatever your political beliefs happen to be. Obviously the view you hold you think is most likely to be true, but I think you should give that something like 60-40, whereas in reality most people will give it 95 to 5 or 99 to 1 in terms of probability that it is correct. Or if you ask people what is the chance this view of yours is wrong, very few people are willing to assign it any number at all. Or if you ask people who believe in God or are atheists, what’s the chance you’re wrong – I’ve asked atheists what’s the chance you’re wrong and they’ll say something like a trillion to one, and that to me is absurd, that even if you think all of the strongest arguments for atheism are correct, your estimate that atheism is in fact the correct point of view shouldn’t be that high, maybe you know 90-10 or 95 to 5, at most. So that maybe is my most absurd view. Most things are much more up for grabs than we like to say they are.

I took away different things from these. if there is anything worse than being wrong it is being doubtful. Is this cultural? Or is it just human?

Rationally, Helen Thomas quitting is sort of wrong. She has an opinion which may be reprehensible to many of us, but it is still an opinion. She did not commit a crime. She probably even has an argument for why she is morally correct in holding that opinion. In any case, she recanted. In spite of that, why is it that Helen Thomas has to quit but this racist state senator doesn’t have to?

Expressing an opinion makes you belong to a certain group who hold the same opinion. The strength of that group – in size and the power of its members – and that of the group that holds opposing views – often determines whether you are right or wrong. Which completely explains why in today’s America anti-semitism can get you punished instantly, but racist remarks can be a cold, calculated play for fringe votes.

Politics and big business drive culture, especially, what is acceptable for public figures and celebrities. Investors will punish a CEO for being wrong (Prudential CEO, Tidjane Thiam) or being in the wrong place at the wrong time and then saying the wrong thing (“I want my life back” – Tony Hayward, BP CEO). But if there is one thing worse than being wrong, it is to be unsure of your beliefs.

Tyler Cowen would like people to be rational and admit that their opinions could have a higher probability of being wrong. But do people really want their leaders to not believe that they are 100% correct?

Imagine if President Obama were selling HCR by saying that “I am 100% certain that this bill will pull millions of uninsured into a life of dignity but only 60% sure that it will reduce our spending on healthcare in the long-term.” Which is pretty much the odds the most optimistic economist might give you.

People don’t even like their leaders to change their opinions. We call it flip-flopping. We not only want our leaders to be certain, we want them to have been certain about the issue at hand, since they gained consciousness. It also helps if their parents had the same stand on said issue.

This is not a development that is recent. Replying to a criticism during the Great Depression of having changed his position on monetary policy, John Keynes was pressured enough to burst out:

When the facts change, I change my mind. What do you do, sir?

I believe that this is a universal phenomenon. Human beings desire strong leaders – fearless and without doubt. Leadership, therefore becomes typed with certitude which becomes a desirable trait even for non-leaders. Which is perhaps unfortunate. With a 70% probability, that is.

The Politics of Financial Reform

Frank Rich writes a hard-hitting piece in the NYT. But he gets one piece wrong:

.. Those who shorted the housing market shorted the country.

There were many things that went wrong with the housing market – people were being given loans who had no chance of repaying it, homeowners were outright lying and the lenders were encouraging them or looking the other way, Wall Street was concocting securities that were several layers of complexity away from the real, underlying assets and the credit rating agencies were designing their models so that they could stamp their approval on these securities. And a bunch of other stuff related to Fannie and Freddie and the absence of any regulatory checks.

But the thing that was not going wrong, enough, was that there weren’t enough people shorting the heck out of these securities. An asset bubble is created when there are too many people in the market willing to buy at higher and higher prices and not enough people betting on the prices to go down.

Goldman Sachs and Paulson & Co. made money as the sub prime market was collapsing around it. Good for them. There’s nothing wrong with that. Goldman didn’t make much since they were late in the game. Paulson made out like a bandit because he was betting against subprime when no one else was. Unless these deals involved cheating or fraud, there is nothing wrong with making money in a collapsing market.

To the common voter, this won’t make sense. It isn’t fair, it isn’t right to be able to make money off of other folks’ misery. To get huge bonuses when people are losing their houses. You can almost see the special feature on CNN – an interview with an old couple who lost their home and their savings immediately followed by some charts on average bonuses at Goldman Sachs (assuming that nobody at Goldman will be stupid enough to give an interview to CNN on this subject). Continue reading

Why Pre Existing Conditions Must Go

In response to my previous post on healthcare reform, a reader writes in from India

…Why should an insurer agree to insure a pre-existing condition? It does not make sense to expect a business to agree to a proposition wherein it knows it will have to pay out 10x on a premium of x….

Insurance by its very definition is protection against the unknown. If the condition and its medical costs are known why take such a customer on board?

Methinks that the reason insurance premiums went up at your small business is because these guys figured out that they will now have to shell out treatment money for everyone and hence they are trying to do a CYA before overall costs go up.

For medical issues, I think either
– a public run healthcare or
– government rights to a percentage of facilities/medicines at institutions that it then distributes among the needy works best.

If there is no government healthcare in the US, it is only logical that average insurance premiums will go up for everyone if the insurance business is expected to mix humanitarian issues with cold-hearted business decisions.

The humanitarian side is actually the governments job. Making money is the private insurance business’s job. Why mix the two?

The main argument the reader makes is perfectly rational. Why should an insurer take on a pre-existing condition when they know they are going to make a loss on it?

They don’t have to today. And that is why we have over 30 million people uninsured. Continue reading

My Personal Tale of Healthcare Insurance

I wanted to get this story out before the Sunday vote in the House. If you believe in healthcare reform, call your Congressman. Most of them will have their offices open tomorrow.

Here’s my personal experience with healthcare from this week. Our healthcare insurer Aetna informed the company that our premiums were almost tripling. For a family of four, our premiums would go up from just over $1000 to over $3000. Why?, we asked. That’s just the way it is, they said. We’re going to have to drop our insurance, we said. Yes, they said, we expected that. And that was that. If you are a business with a small payroll, you and your employees are at the mercy of the healthcare insurer.

So, now I have to go out and get insurance for the family. My wife’s employer, also a small business, offers insurance, but I thought I’d go out and see if I could get insurance directly.

I called Anthem Blue Cross. Nice lady at the other end. Took down all the details. Then we came to pre-existing conditions. I said my son had one and described it. She said that she’d have to put me on hold. She was back in less than 10 seconds. Anthem Blue Cross could not offer any insurance at all. Sorry.

I then called Kaiser Permanente. My wife’s employer offers Kaiser and I thought I’d see if I could something directly with them. Kaiser doesn’t decline on the phone, you have to put in an application, which may be declined (it’s more polite, but everyone spends much more time making and reviewing applications). The guy on the phone was helpful. If you get Kaiser at your wife’s company, take it, was his advice.

Now, we have options. Even if we didn’t have my wife’s insurance, we wouldn’t be out on the streets, if something were to happen. But for many Americans (over 30 million of them) there are no options. If they don’t have a job or they have a job that doesn’t offer insurance, and they have a pre-existing condition, they won’t get insurance. Hospitalization in this country can cost $20,000 and up. Which means that they could be just one major illness away from bankruptcy.

Now, about this bill. It’s a very, very long bill. If you really want to understand the issues it tackles, go read Ezra Klein. But basically it boils down to a few things. Health insurers should not be able to deny insurance based upon pre-existing conditions. It also bans recissions (kicking an insured person out) and life time caps (another cute trick to limit payouts). To make this work for insurance companies there has to be an individual mandate (everyone must get insurance).

Six months after the bill is passed, denying insurance based upon pre-existing conditions for children will become illegal. That’s when I’m going to call Anthem Blue Cross again. I can only imagine how many people are waiting with far more desperation for that six month boundary to be crossed.

Here’s where you find out who to call http://www.congress.org/

If you are calling right now, call your Congressman. If you read this blog, and you live in the US, you probably have a nice job and healthcare at work. If I were you, here’s what I would say to his or her aide on the phone:

Congressman (or Congresswoman) I have a nice job and healthcare insurance. I am calling you in spite of the fact that I have nothing to gain if this bill passes. That’s because I feel for those people who do not have insurance today or can’t get it. We cannot be a great country if we let our people sink into misery because we’ve let healthcare become the monster it is today.

Please fix healthcare by voting yes on healthcare reform.

Online Education is Coming, And Fast

An in depth piece in the New York Times magazine looks at an effort to improve teacher quality through training. While this particular initiative may be better than the hundreds of other such initiatives, I find myself wondering if teacher training is indeed that big systemic change that the school education needs. Is it just tinkering with the edges when what we need is seismic shifts?

There are a whole host of problems facing the school education system in the US. Teacher training is just one of them.

The sheer number of teachers required and the low pay almost ensures that the average school teacher will not be anywhere near the best that American colleges turn out. If you think about it, isn’t a school teacher’s job, in whose hands we leave our children’s education, much more valuable to society than a lawyer’s or a banker’s. Unfortunately, society puts a really low price on it. Continue reading

Europe is Getting Less Secular

The latest flap over halal meat served in a restaurant in France

A French fast food chain’s decision to serve only halal meat in eight restaurants with a strong Muslim clientele has sparked a wave of criticism from politicians decrying the step as unacceptable.

Quick, the restaurant chain, is also not serving any pork products in these restaurants.

Right wing politicians are making hay out of the incident. But to anybody not blinkered by religious prejudice, there is absolutely no logical argument that you can make against Quick’s decision. Quick is free to tailor their product to suit individual or group preferences. Customers who don’t like halal meat, even though it tastes identical, are free to go elsewhere for their meals. Customers who would like pork in their meals could also follow suit.

I would spend a little more time on searching for a grain of logic in the arguments of the critics, but that would be a waste of time. What is clearly happening is that Europe is seeing growing pressure against its secular principles. Switzerland’s minaret ban vote is another case in point. France itself is pretty close to banning the burqa, which I have to admit is not as illogical as the tirade against halal only restaurants, but is fueled largely by political calculations and an anti-minority sentiment.

When jobs are scarce, people turn against immigrants. Most of the Muslims in Europe are immigrants from North Africa or South Asia. Add that to the fact that some people can’t separate terrorists from the religion itself and you have a situation ripe for exploitation by politicians like Jean-Marie Le Pen.

This movie still has a few reels left.

Money Begets Power Begets Money

Larry Lessig calls campaign fund-raising another form of corruption. It is interesting that in India if it were possible to get special interests to lawfully contribute to the campaign funds of politicians and not their own private accounts, we would probably declare victory against political corruption.

But, if you leave aside the fact that one is pernicious but lawful (the US) and the other is illegal and pernicious, there is little to choose between the two forms of corruption. The Indian version enriches the politician and his family. The primary use of that money is to fight elections (where the funds are used to buy mixer-grinders for the electorate, not TV ads). Money therefore becomes the means to stay in power.

In the US, it is the other way around. Campaign funds are used to fight elections. Once you win there are other legal ways to make money. Like through your spouses.

Ultimately, money and power are both means to ends and ends in of themselves. Whether special interests provide money to the politician or his campaign fund, they corrupt government and weaken democracy.