Kevin Drum

Housing Prices Are Up, Up, Up in Southern California

| Wed Jun. 12, 2013 8:25 AM PDT

Housing prices nationwide are up, but in most areas we haven't seen scary kinds of increases. It's a different story here in Southern California, though, where home prices have risen 25 percent in the past year:

"We're deep into uncharted territory," DataQuick President John Walsh said, citing "razor-thin" inventory, pent-up demand, low interest rates and all-cash purchases by investors and wealthy individuals. "How this all plays out is educated guesswork at this point."

....Extremely low inventory and mortgage rates have ignited those bidding wars and helped turn the housing market into an economic bright spot — both in the Southland and nationwide. Investors have also played a major role in the recovery that began last year, buying run-down, lower-cost properties to fix up and rent out.

Is this a bellwether for the future—and for the rest of the country? Maybe not. Richard Green, director of USC's Lusk Center for Real Estate, thinks prices will ease later in the year for a simple reason: "Ultimately, people don't have the income," he says. That's cheery news, isn't it?

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Watching the Watchmen, NSA Edition

| Wed Jun. 12, 2013 7:35 AM PDT

Dan Drezner has a generally good take today on the NSA surveillance programs that have dominated the news for the past week. It's worth a read. In particular, here's his response to Tom Friedman's conclusion that the programs don't "appear" to have been abused:

Friedman allows that these surveillance programs are vulnerable to abuse but says that, "so far, [it] does not appear to have happened." Here's my question: how the f**k would Friedman know if abuse did occur? We're dealing with super-secret programs here. Exactly what investigative or oversight body would detect such abuse? What I worry about is that we have no idea whether national security bureaucracies abuse their privilege.

The last time I trusted intelligence bureaucracies and political leaders that the system was working was the run-up to the Iraq war. Never again.

The traditional method of oversight is via congressional committees and the court system. But even if you assume that intelligence organizations are reporting their activities honestly, those don't really work anymore. Once a program is in place, courts end up rubber stamping virtually every application and congressional committees do pretty much the same. They simply become too accustomed to what's going on to truly pay attention. And in the case of Congress, even if some members do have issues, they're all but gagged from speaking out about them.

In some way, it strikes me that the answer needs to lie somewhere else. Someplace where the faces change more often and there's less institutional pressure to automatically approve of whatever's going on. Someplace that has, at the very least, a certain amount of authority to explain publicly the broad outlines of what the surveillance state is doing. But where?

Maybe America Doesn't Like the NSA Phone Surveillance Program After All

| Tue Jun. 11, 2013 4:07 PM PDT

This is from the AP today:

A leading Republican senator on Tuesday described controversial U.S. spy programs as looking far deeper into Americans' phone records than the Obama administration has been willing to admit, fueling new privacy concerns as Congress sought to defend the surveillance systems.

Sen. Lindsey Graham, R-SC., says the U.S. intelligence surveillance of phone records allows analysts to monitor U.S. phone records for a pattern of calls, even if those numbers have no known connection to terrorism. Graham says the National Security Agency then matches phone numbers against known terrorists. Graham helped draft the surveillance law that governs the surveillance program.

Technically, I guess this is true, since the Obama administration hasn't been willing to say anything about the NSA phone surveillance program. But aside from that, this is what everyone in the world has been talking about for days, ever since the Verizon warrant was first revealed: pattern matching, link analysis, and data mining in general. So this is hardly a fresh bombshell. Still, in a way I guess it's the first official-ish acknowledgement that this is what NSA is doing, so that makes it news.

Elsewhere, CBS News reports that 58 percent of Americans disapprove of the government collecting the phone records of ordinary Americans. Yesterday, Pew reported that 56 percent of Americans approved. Obviously, question wording is going to be a real headache on this issue.

So Far, We Haven't Learned Much From the NSA Leaks

| Tue Jun. 11, 2013 12:02 PM PDT

Sam Stein reports that the Obama White House briefed members of Congress on the PRISM program 22 times between October 2011 and December 2012. However:

The fact that 22 meetings and briefings were held for members of Congress does help the administration argue its case that this wasn't simply an example of executive overreach. That said, it's impossible to know — without receiving notes from the meeting — whether or not the PRISM program was discussed during the sessions, or whether the meetings were more broadly about Section 702.

This gets to one of the reasons that I remain conflicted about all this. The PRISM program itself, as near as I can tell, is mostly a technical means of transmitting data and making it available to analysts. I'd like to understand it better, but the truth is, unless you're a bit of a geek you probably shouldn't care about it much. It's hardly a revelation that the intelligence community uses software to manage its huge masses of data, after all.

What you should care about is Section 702 of the FISA Amendments Act and how it's being interpreted. In other words, you should care about what data NSA has, not what software they use to manage it. So far, though, all the leaks about PRISM haven't really given us any insight into that. We've known for a long time that various agencies have ramped up their use of warrants and National Security Letters to demand data from tech companies, and we've been suspicious for a long time about just how broad this data collection is. Today, in the wake of all the PRISM leaks, we're even more suspicious—but we don't know anything more than we used to. What I'd like to see are the warrants themselves and the minimization procedures attached to them, but so far nobody's leaked any of those.

I feel the same way about the NSA phone surveillance program. When Glenn Greenwald first broke the story, I was a little puzzled, and I still am. This program began in 2002. It was exposed in 2005 and created enormous controversy. In 2007 and 2008, Congress gave it a legal basis. There has never been any suggestion that it was shut down, and I can't figure out why anyone would have thought it ever was. I sort of feel like this was a fight we lost years ago.

Bottom line: I'm happy that this is getting another round of scrutiny, but I'm still not sure what I've learned that I didn't already know. That will require either different leaks or else a decision by the White House to produce a serious white paper about our nation's surveillance programs—something I'll bet they could do without seriously endangering any of them. Unfortunately, the presidential candidate who campaigned on his commitment to more transparency in these programs doesn't seem inclined to do that now that he's sitting in the Oval Office. So I guess we'll have to rely on more leaks instead.

UPDATE: Alternatively, a bill to declassify key FISA court rulings might be a good start. More here.

Barack Obama and the Anti-Neustadt Presidency

| Tue Jun. 11, 2013 11:17 AM PDT

Jamelle Bouie is dismayed that President Obama decided this morning to announce that he supports the Gang of Eight immigration bill:

In no way is it an exaggeration to say that President Obama’s speech came at the worst possible time. Later this afternoon, the Senate will take a procedural vote that will determine whether or not chamber decides to begin debate on the Gang of Eight bill.

Insofar that Rubio, Jeff Flake, Lindsay Graham and others were having a hard time bringing conservatives to their side, it’s now even more difficult. And if House Republicans take this as a cue to reflexively oppose reform, it puts Boehner in a tight spot—does he try to build a GOP majority for the bill? Does he abandon the “Hastert rule” and pass a bill with Democratic support! Or does he leave the effort altogether?

If this sounds dramatic, then you are drastically underestimating the anti-Obama furor of the Republican base, which has ended political careers for the sin of being friendly with the president. If Obama wants comprehensive immigration reform to pass, he needs to stay completely out of the way. If he wants to claim some credit, he can do so at the signing.

I don't disagree with Bouie, quite. It's not that. But his post made me wonder if this has now congealed into firm conventional wisdom on both sides: Obama needs to stay aloof from any issue he actually cares about, because his public support is always and everywhere unhelpful. Democrats don't care and Republicans will go running for the exits at the mere prospect of being insufficiently hostile to him.

Is that what we've come to? I guess so, but I still can hardly believe it when I see it actually set down in black and white.

The Financialization of America (and the World)

| Tue Jun. 11, 2013 8:55 AM PDT

Bruce Bartlett writes today about the relentless financialization of the American economy and the danger it poses:

Ozgur Orhangazi of Roosevelt University has found that investment in the real sector of the economy falls when financialization rises....Adair Turner, formerly Britain’s top financial regulator, [suggests] that the financial sector’s gains have been more in the form of economic rents — basically something for nothing — than the return to greater economic value.

Another way that the financial sector leeches growth from other sectors is by attracting a rising share of the nation’s “best and brightest” workers, depriving other sectors like manufacturing of their skills.

The rising share of income going to financial assets also contributes to labor’s falling share....This phenomenon is a major cause of rising income inequality, which itself is an important reason for inadequate growth.

The dangers of runaway financialization are pretty well known and pretty well accepted. Given that, the key question you should ask is: Why? It's not inevitable, after all. The finance industry doesn't grow because some fundamental feature of the modern economy demands it. In fact, it's really more mysterious than it seems. After all, we know why, say, the car industry grew during the 20th century: because more people wanted cars. Likewise, we know why the tech industry is growing now: because more people want to surf the net and play video games.

So why has finance grown? Because the world needs more finance? Up to a point, sure: availability of capital is a key requirement for economic growth in a modern mixed economy. But we passed that point quite a while ago. Capital has been freely and easily available in America and most of the developed world for decades. So again: Why the continued growth? It doesn't seem to be demand driven, so there must be some other reason. Anyone care to guess in comments? No prizes for the right answer, I'm afraid.

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Plan B Drives Conservatives Crazy

| Tue Jun. 11, 2013 8:30 AM PDT

Over at The Corner, Wesley Smith passes along the story of a mother who pretended to be her 12-year-old daughter and successfully trapped an online sexual predator. Then, for some reason, he adds this:

Now, think about this story in the context of the Obama Administration’s decision to allow “women of all ages”—in the parlance of the radical reproductive rights crowd—to obtain the morning-after-pill without supervision. It will be yet another way in which parents could be kept in the dark about what is happening to their own children, perhaps even when they are victims of sexual predation. Truly sickening.

These people don't even make sense any more. Apparently the existence of online creeps is a good reason to prevent teenagers from deciding whether or not they want to bear children. Or something. Jesus.

What Does PRISM Do? How Does It Work? Take 2.

| Mon Jun. 10, 2013 9:20 PM PDT

I learned today that the military—which, as you know, runs NSA—has long had an unclassified software package called PRISM that's a sort of workflow or project management tool for information collection. Here's a description from the Army Field Manual:

The description here of a "collection manager" initiating a sequence that results in a "mission tasking order" sounds fairly close to the Washington Post's description of PRISM as a tool that allows "collection managers [to send] content tasking instructions" to equipment installed at Google, Microsoft, and other companies.

So now I'm curious: Is Edward Snowden's PRISM the same as the piece of software described here? Is it just a vanilla piece of project management software that's widely used throughout the military? Or is it something else that's more specialized and just happens to have the same name? I'm not sure who can clear this up, but perhaps either Glenn Greenwald or Barton Gellman have some insight into this.

New Poll Says American Public is Fine With NSA Surveillance

| Mon Jun. 10, 2013 5:11 PM PDT

Pew is out with the first poll asking the public what it thinks of the NSA phone record surveillance program. Unsurprisingly, the public thinks it's just peachy, by a margin of 56-41. What is surprising, though, is the epic size of the change in partisan attitudes since 2006. Back then, Republicans approved of the (recently revealed) NSA program by 38 points more than Democrats. Now, Republicans disapprove by 12 points more than Democrats.

This isn't the last word on the subject. The wording of the question is different this year compared to 2006, and that might account for a bit of the difference. But probably not much. Basically, when Bush was president, Republicans thought that monitoring telephone traffic was a great idea. Now, when Obama is president, they're not so sure—but Democrats think it's fine and dandy. This is about as remarkable a turnaround as I've seen on any subject in recent years.

Unfortunately, it's going to be harder than I thought to eventually get a firm read on this. I had figured that early polls would be tentative because so few people would understand what the NSA program entails (i.e., legal vs. warrantless, every call vs. some calls, metadata vs. listening in). Later polls would get progressively more accurate as this stuff became better known. But now that the PRISM program has also been revealed, it's likely that future polls will be forced to use mushy wording and public opinion will be a bit more confused. Oh well.

Why the NSA Surveillance Program Isn't Like "The Wire"

| Mon Jun. 10, 2013 10:06 AM PDT
the wire wiretap

David Simon, creator of The Wire, got a lot of attention over the weekend for his defense of the NSA program that collects records of every phone call made in the United States. It's really nothing new, he says:

Allow for a comparable example, dating to the early 1980s in a place called Baltimore, Maryland.

There, city detectives once began to suspect that major traffickers were using a combination of public pay phones and digital pagers to communicate their business. And they took their suspicions to a judge and obtained court orders — not to monitor any particular suspect, but to instead cull the dialed numbers from the thousands and thousands of calls made to and from certain city pay phones.

Think about it. There is certainly a public expectation of privacy when you pick up a pay phone on the streets of Baltimore, is there not? And certainly, the detectives knew that many, many Baltimoreans were using those pay phones for legitimate telephonic communication. Yet, a city judge had no problem allowing them to place dialed-number recorders on as many pay phones as they felt the need to monitor, knowing that every single number dialed to or from those phones would be captured. So authorized, detectives gleaned the numbers of digital pagers and they began monitoring the incoming digitized numbers on those pagers — even though they had yet to learn to whom those pagers belonged. The judges were okay with that, too, and signed another order allowing the suspect pagers to be “cloned” by detectives, even though in some cases the suspect in possession of the pager was not yet positively identified.

Point taken. But Simon's point only goes so far. Suppose, instead, his detectives had gone to a judge and asked for permission to monitor calls on every pay phone in Baltimore County; to monitor those phones indefinitely; to use the records for any purpose they chose; and to keep those records permanently. Would the judge still have approved it?

I'm guessing not. But that's what's been approved for the NSA. It's very different from Simon's example in Baltimore, and one thing that surprises me a bit is how little of the conversation surrounding the NSA program has addressed the key reason for this difference: Simon's detectives were focused on a specific enterprise happening in the present. NSA is focused on anything that might happen in the future.

This cuts both ways in the debate. On the one hand: I find it quite likely that NSA isn't currently abusing the phone surveillance program. They really and truly don't care about Occupy Wall Street. They care about Al Qaeda, and that's where their focus is. But who cares? Programs like this often start with good intentions. The problem is that this kind of indefinite data collection makes abuse far more likely in the future. Someday there will be a different president in the White House, there will be a different head of NSA, and there will be different professionals running the program. What will they do with all that data the next time something happens that makes America crazy for a few years? I don't know, but I do know that if they don't have the data in the first place they can't abuse it.

On the other hand: You can make a pretty good case that groups like Al Qaeda are only truly dangerous if they get their hands on nukes or weaponized biological weapons. So our real counterterrorism emphasis, the place we should be willing to spare no effort, should be on preventing that. But nukes and biologicals are hard things to get hold of, and they can't be acquired solely via carrier pigeons and couriers. One way or another, they'll almost certainly leave a digital footprint, and this means that our best way of preventing a mass attack is to keep very close track of digital communications around the globe. Thus the need for NSA's phone surveillance database.

I have no idea how to evaluate either of these things, and I don't have a third hand to offer. But the future is what we should be talking about. Even if NSA's programs haven't been abused yet, that doesn't mean they're okay. Likewise, even if they haven't produced any great benefits yet, that doesn't mean they're stupid and useless. It's the future that matters.