The Economy Is Even Worse Than You Think
July 14, 2009
Wall Street Journal
by Mortimer Zuckerman
The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.
The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.
Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:
- June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.
- More companies are asking employees to take unpaid leave. These people don’t count on the unemployment roll.
- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn’t searched for work in the four weeks preceding the survey.
- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.
- The average work week for rank-and-file employees in the private sector, roughly 80% of the work force, slipped to 33 hours. That’s 48 minutes a week less than before the recession began, the lowest level since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water, and factories are operating at only 65% of capacity. If Americans were still clocking those extra 48 minutes a week now, the same aggregate amount of work would get done with 3.3 million fewer employees, which means that if it were not for the shorter work week the jobless rate would be 11.7%, not 9.5% (which far exceeds the 8% rate projected by the Obama administration).
- The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
- The average worker saw no wage gains in June, with average compensation running flat at $18.53 an hour.
- The goods producing sector is losing the most jobs — 223,000 in the last report alone.
- The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business. General Motors and Chrysler, closed hundreds of dealerships and reduced brands. Citigroup and Bank of America cut tens of thousands of positions and exited many parts of the world of finance.
Job losses may last well into 2010 to hit an unemployment peak close to 11%. That unemployment rate may be sustained for an extended period.
Can we find comfort in the fact that employment has long been considered a lagging indicator? It is conventionally seen as having limited predictive power since employment reflects decisions taken earlier in the business cycle. But today is different. Unemployment has doubled to 9.5% from 4.8% in only 16 months, a rate so fast it may influence future economic behavior and outlook.
How could this happen when Washington has thrown trillions of dollars into the pot, including the famous $787 billion in stimulus spending that was supposed to yield $1.50 in growth for every dollar spent? For a start, too much of the money went to transfer payments such as Medicaid, jobless benefits and the like that do nothing for jobs and growth. The spending that creates new jobs is new spending, particularly on infrastructure. It amounts to less than 10% of the stimulus package today.
About 40% of U.S. workers believe the recession will continue for another full year, and their pessimism is justified. As paychecks shrink and disappear, consumers are more hesitant to spend and won’t lead the economy out of the doldrums quickly enough.
It may have made him unpopular in parts of the Obama administration, but Vice President Joe Biden was right when he said a week ago that the administration misread how bad the economy was and how effective the stimulus would be. It was supposed to be about jobs but it wasn’t. The Recovery Act was a single piece of legislation but it included thousands of funding schemes for tens of thousands of projects, and those programs are stuck in the bureaucracy as the government releases the funds with typical inefficiency.
Another $150 billion, which was allocated to state coffers to continue programs like Medicaid, did not add new jobs; hundreds of billions were set aside for tax cuts and for new benefits for the poor and the unemployed, and they did not add new jobs. Now state budgets are drowning in red ink as jobless claims and Medicaid bills climb.
Next year state budgets will have depleted their initial rescue dollars. Absent another rescue plan, they will have no choice but to slash spending, raise taxes, or both. State and local governments, representing about 15% of the economy, are beginning the worst contraction in postwar history amid a deficit of $166 billion for fiscal 2010, according to the Center on Budget and Policy Priorities, and a gap of $350 billion in fiscal 2011.
Households overburdened with historic levels of debt will also be saving more. The savings rate has already jumped to almost 7% of after-tax income from 0% in 2007, and it is still going up. Every dollar of saving comes out of consumption. Since consumer spending is the economy’s main driver, we are going to have a weak consumer sector and many businesses simply won’t have the means or the need to hire employees. After the 1990-91 recessions, consumers went out and bought houses, cars and other expensive goods. This time, the combination of a weak job picture and a severe credit crunch means that people won’t be able to get the financing for big expenditures, and those who can borrow will be reluctant to do so. The paycheck has returned as the primary source of spending.
This process is nowhere near complete and, until it is, the economy will barely grow if it does at all, and it may well oscillate between sluggish growth and modest decline for the next several years until the rebalancing of excessive debt has been completed. Until then, the economy will be deprived of adequate profits and cash flow, and businesses will not start to hire nor race to make capital expenditures when they have vast idle capacity.
No wonder poll after poll shows a steady erosion of confidence in the stimulus. So what kind of second-act stimulus should we look for? Something that might have a real multiplier effect, not a congressional wish list of pet programs. It is critical that the Obama administration not play politics with the issue. The time to get ready for a serious infrastructure program is now. It’s a shame Washington didn’t get it right the first time.
Click here for the full editorial from the Wall Street Journal.
U.S. to Spend Another $1 Billion on Flu Vaccine
July 13, 2009 by mike
Filed under Government
July 12, 2009
Reuters
The United States will spend another $1 billion on ingredients for an H1N1 vaccine, U.S. Health and Human Services Secretary Kathleen Sebelius said on Sunday.
“There’ll be another $1 billion worth of orders placed to get the bulk ingredients for an H1N1 vaccination. Congress has agreed with the president that this is the number one priority, keeping Americans safe and secure,” Sebelius said on CNN.
Sebelius has said plans were on track for a mid-October vaccination program, although it was not certain Americans would be offered the vaccine for the so-called swine flu.
“We are aggressively working on, first of all, testing the virus strains to get a vaccination ready. It needs to be safe so testing and clinical trials will start this month. We’ll know a lot more by the end of the summer and it needs to be effective,” she said.
The World Health Organization may issue guidance as soon as Monday on whether an H1N1 swine flu vaccine will be offered alongside the seasonal flu vaccine.
Vaccine makers Sanofi-Aventis, Novartis, Baxter, GlaxoSmithKline, Solvay and AstraZeneca’s MedImmune subsidiary have finished making seasonal flu vaccines for this year.
The U.S. Food and Drug Administration has scheduled a July 23 advisory panel meeting to discuss clinical trials of the vaccines against the H1N1 influenza virus and the U.S. Advisory Committee on Immunization Practice wills meet July 29.
“FDA is working with the scientists at NIH (National Institutes of Health) to make sure that we have a safe and effective strain and then we’re getting ready to make sure that we have a vaccination program,” Sebelius said.
Health experts estimate at least 1 million people have been infected with H1N1 in the United States, and the U.S. Centers for Disease Control and Prevention has confirmed 211 deaths. It often takes weeks or months to collect data on flu deaths.
About 36,000 people die each year from the seasonal flu in the United States alone, and 250,000 to 500,000 die globally.
Click here for the full report from Reuters.
Blood Thinner Effient Gets FDA Approval with Warning
The approval makes Lilly’s Effient the first real competition to the blood thinner Plavix, the world’s second-best selling medication made by Sanofi-Aventis and Bristol-Myers Squibb.
The FDA delayed its decision on Effient multiple times during an 18-month review, as agency staffers weighed the drug’s benefits versus its risks.
A study of over 13,000 patients conducted by Lilly found that Effient prevents more heart attacks than Plavix, but also causes more internal bleeding.
The FDA said Effient will carry a boxed warning to alert physicians to the risks of “significant, sometimes fatal, bleeding.” The boxed warning is reserved for issues that can cause serious injury or death.
The drug should not be taken by patients with a history of bleeding, stroke or who are undergoing surgery, the FDA said.
“Physicians must carefully weigh the potential benefits and risks of Effient as they decide which patients should receive the drug,” said Dr. John Jenkins, FDA’s director of new drugs.
The drug offers an alternative treatment for preventing dangerous blood clots that can lead to heart attack or stroke, Jenkins said. Company studies showed 7% of patients taking Effient experienced nonfatal heart attacks, compared with 9.1% of patients taking Plavix. Despite lower rates of certain heart attacks, the actual rates of death were similar for both drugs.
Indianapolis-based Lilly developed Effient, known chemically as prasugrel, with Japanese drugmaker Daiichi Sankyo Co. The two companies will share revenue.
“After more than a decade of research and testing, we are proud to provide this new treatment option to patients with acute coronary syndrome,” Daiichi President Takashi Shoda said in a statement.
Wall Street analysts say Effient sales could reach an estimated $1 billion annually, compared with the $4.9 billion racked up by Plavix last year.
Like Plavix, Effient prevents blood platelets from sticking together and forming potentially dangerous clots. But where Plavix is approved for use in a wide range of patients, Effient is only approved for those undergoing angioplasty, a common procedure in which an inflatable balloon is used to clear arteries clogged with plaque.
Approval of Effient was considered crucial for Lilly because patents protecting its four best-selling drugs expire by 2013.
But even if the drug reaches the $1 billion mark, it will have trouble replacing the revenue of Lilly’s best-selling product, the anti-psychotic Zyprexa, which garnered $4.7 billion in sales last year.
Click here for the full report from USA Today.
Swine Flu Kills Obese People: Is U.S. Primed for a Pandemic Catastrophe?
July 13, 2009
Natural News
by Mike Adams
The fact that nearly two-thirds of U.S. adults are clinically obese is worrisome for a whole new reason: Evidence emerging from a hospital in Michigan (and published by the CDC) appears to indicate that obese patients may be very easily killed by swine flu.
In the Centers for Disease Control and Prevention’s report on death and disease, researchers documented the case of ten swine flu patients at a Michigan hospital who became so ill they were put on ventilators. Three of the patients ultimately died from the infection. The kicker? Nine of the ten were obese, and two of the three who died were severely obese.
As reported by Reuters, CDC virologist Dr. Tim Uyeki said, “What this suggests is that there can be severe complications associated with this virus infection, especially in severely obese patients.”
Notably, five of the patients showed evidence of blood clots in their lungs, indicating severe cellular trauma in the lungs. Nine of the patients suffered from multiple organ failure, and six experienced kidney failure.
These findings are especially worrisome because nearly two-thirds of U.S. adults are now clinically obese. Combined with widespread vitamin D deficiency, nutritional deficiencies and pharmaceutically-induced immune suppression, the U.S. population is more vulnerable to a pandemic right now than any other population in the history of the world.
The American people, in other words, are primed for a pandemic. Virtually no one in America is both physically fit and nutritionally healthy anymore. Shockingly, most Americans don’t even recognize physical fitness anymore, thinking that excess body fat is normal and that obese babies are just “chubby.” Should the circulating swine flu combine with seasonal flu this fall, it could devastate the immunologically vulnerable U.S. population, potentially killing millions.
The number of patients reviewed in this study is quite small (only ten), but even so, this could be a warning sign of more deaths to come from infected, obese patients. Of course, there’s really no mystery why obesity may cause extreme vulnerability to swine flu infections: The virus kills through an inflammatory process, and obesity is, itself, a highly-inflammatory condition that only exacerbates the deadliness of the H1N1 virus.
Patients who have made themselves obese — for whatever reason — have also unleashed a storm of inflammatory cytokines in their blood, and these cytokines are precisely what get over-excited during the body’s response to a swine flu infection, leading to organ damage and death. This is precisely why people wishing to survive the coming pandemic must make a special effort to attain a high level of physical and nutritional health before such a pandemic arrives.
Being obese compromises your body’s immune system, liver, heart, lungs and kidneys. This puts a serious additional burden on your body, leaving few spare resources for fighting off infections. That’s probably why nine out of ten swine flu victims documented in the Michigan hospital were obese.
The bottom line in this study is quite clear: Don’t be obese during the next pandemic. If you are obese now, let this bit of knowledge provide whatever extra motivation you need to drop some excess body fat and reduce the inflammatory burden on your body’s organs. Obesity is, after all, readily reversed through simple changes in diet and exercise habits.
Click here for the full report from NaturalNews.com
US FDA Staff Question J&J, Zeltia Cancer Drug Data
July 13, 2009 by mike
Filed under Government
July 13, 2009
Reuters
By Lisa Richwine
U.S. drug reviewers will ask outside advisers if a Johnson & Johnson and Zeltia drug provides enough benefit to justify its approval for women with ovarian cancer, a memo released on Monday said.
Shares of Spanish biotechnology company Zeltia dropped 19 percent to 4.47 euros in Madrid trading.
Food and Drug Administration staff said discrepancies in radiology readings raised the question of whether patients’ status was reliably measured in the main study of the drug, Yondelis. The study examined the time it took the cancer to worsen when patients were treated with a combination of Yondelis and another J&J cancer drug, Doxil.
Doxil is already approved for treating cancer, while Yondelis is not currently sold in the United States.
FDA staff said they would ask an advisory panel that meets Wednesday if the results “are reliable, are clinically significant, and are associated with an acceptable benefit:risk ratio.”
The study found patients had about six more weeks without their cancer getting worse if they were treated with Doxil. FDA staff said they would ask the advisory panel if the extra six weeks “at a cost of additional toxicity is sufficient benefit for approval.”
The main side effects included a decrease in white blood cells that can make patients vulnerable to infections, the FDA reviewers said. Cardiac problems also were higher in patients who received Yondelis.
CM Capital Markets equity analyst Flemming Barton said the staff review “casts doubts over Zeltia’s flagship drug.”
“This is bad news … There was a lot of expectation that the FDA would give the green light right away,” Barton said.
“But the stock has had a very good run, outperforming the broad market ahead of the FDA decision, so it’s not so surprising there are sell orders in there now,” he added.
The FDA staff said they would ask the panel if the agency should wait for a final analysis of patients’ survival before deciding whether to approve Yondelis for sale, the drug reviewers said in a memo prepared for the panel. The drug’s generic name is trabectedin.
Johnson & Johnson, in a separate summary prepared for the panel, said the Yondelis and Doxil combination offered a safe and effective option, especially for women with relapsed ovarian cancer who cannot take other platinum-based regimens.
A Zeltia spokesman said the balance of benefits and risks for Yondelis was “positive.”
J&J also is seeking approval in a separate application for wider use of Doxil in breast cancer patients. FDA reviewers said they had concerns about the company’s proposed regimen of adding Doxil to another drug, docetaxel, as a first-choice therapy.
The combination produced “modest improvement” in the time before cancer started growing but no improvement in overall survival, FDA reviewers said. The regimen was “poorly tolerated” and 34 percent of patients stopped taking Doxil due to side effects.
J&J said Doxil “offers an effective treatment option, without increased risk of cardiac toxicity” seen with other drugs.
The FDA will consider the advisory panel’s input before deciding whether to approve Yondelis and the new use for Doxil. The agency usually follows panel recommendations.
Click here for the full report from Reuters.
Obesity ‘Link to Same-Sex Parent’
July 12, 2009
BBC News
A study of 226 families by Plymouth’s Peninsula Medical School found obese mothers were 10 times more likely to have obese daughters.
For fathers and sons, there was a six-fold rise. But in both cases children of the opposite sex were not affected.
The researchers believe the link is behavioural rather than genetic.
They say the findings mean policy on obesity should be re-thought.
Researchers said it was “highly unlikely” that genetics was playing a role in the findings as it would be unusual for them to influence children along gender lines.
Instead, they said it was probably because of some form of “behavioural sympathy” where daughters copied the lifestyles of their mothers and sons their fathers.
It is because of this conclusion that experts believe government policy on tackling obesity should be re-thought.
Much of the focus so far in the UK – in terms of targets and monitoring – has been targeted at younger age groups in the belief that obese children become obese adults.
But the researchers said the assumption ignored the fact that eight in 10 obese adults were not severely overweight when they were children.
In fact, they said their findings suggested the opposite was true – that obese adults led to obese children, the International Journal of Obesity reported.
Study leader Professor Terry Wilkin said: “It is the reverse of what we have thought and this has fundamental implications for policy.
“We should be targeting the parents and that is not something we have really done to date.”
Click here for the full report and video from BBC News.
CIA Had Secret Al Qaeda Plan
July 13, 2009 by mike
Filed under Government
July 13, 2009
Wall Street Journal
by Siobhan Gorman
WASHINGTON — A secret Central Intelligence Agency initiative terminated by Director Leon Panetta was an attempt to carry out a 2001 presidential authorization to capture or kill al Qaeda operatives, according to former intelligence officials familiar with the matter.
Sen. Dianne Feinstein said CIA Director Panetta, above, told lawmakers Vice President Cheney ordered information be withheld from Congress.
The precise nature of the highly classified effort isn’t clear, and the CIA won’t comment on its substance.
According to current and former government officials, the agency spent money on planning and possibly some training. It was acting on a 2001 presidential legal pronouncement, known as a finding, which authorized the CIA to pursue such efforts. The initiative hadn’t become fully operational at the time Mr. Panetta ended it.
In 2001, the CIA also examined the subject of targeted assassinations of al Qaeda leaders, according to three former intelligence officials. It appears that those discussions tapered off within six months. It isn’t clear whether they were an early part of the CIA initiative that Mr. Panetta stopped.
The revelations about the CIA and its post-9/11 activities have emerged amid a renewed fight between the agency and congressional Democrats. Last week, seven Democratic lawmakers on the House Intelligence Committee released a letter that talked about the CIA effort, which they said Mr. Panetta acknowledged hadn’t been properly vetted with Congress. CIA officials had brought the matter to Mr. Panetta’s attention and had recommended he inform Congress.
The battle is part of a long-running tug of war between the executive branch and the legislature about how to oversee the activities of the country’s intelligence services and how extensively the CIA should brief Congress. In recent years, in the light of revelations over CIA secret prisons and harsh interrogation techniques, Congress has pushed for greater oversight. The Obama administration, much like its predecessor, is resisting any moves in that direction.
Most recently, House Speaker Nancy Pelosi, in a dispute over what she knew about the use of waterboarding in interrogating terror suspects, has accused the agency of lying to lawmakers about its operations.
Republicans on the panel say that the CIA effort didn’t advance to a point where Congress clearly should have been notified.
CIA spokesman Paul Gimigliano said the agency “has not commented on the substance of the effort.” He added that “a candid dialogue with Congress is very important to this director and this agency.”
One former senior intelligence official said the program was an attempt “to achieve a capacity to carry out something that was directed in the finding,” meaning it was looking for ways to capture or kill al Qaeda chieftains.
The official noted that Congress had long been briefed on the finding, and that the CIA effort wasn’t so much a program as “many ideas suggested over the course of years.” It hadn’t come close to fruition, he added.
Michigan Rep. Pete Hoekstra, the top Republican on the House Intelligence Committee, said little had been spent on the efforts — closer to $1 million than $50 million. “The idea for this kind of program was tossed around in fits and starts,” he said.
Senior CIA leaders were briefed two or three times on the most recent iteration of the initiative, the last time in the spring of 2008. At that time, CIA brass said that the effort should be narrowed and that Congress should be briefed if the preparations reached a critical stage, a former senior intelligence official said.
Amid the high alert following the Sept. 11 terrorist attacks, a small CIA unit examined the potential for targeted assassinations of al Qaeda operatives, according to the three former officials. The Ford administration had banned assassinations in the response to investigations into intelligence abuses in the 1970s. Some officials who advocated the approach were seeking to build teams of CIA and military Special Forces commandos to emulate what the Israelis did after the Munich Olympics terrorist attacks, said another former intelligence official.
“It was straight out of the movies,” one of the former intelligence officials said. “It was like: Let’s kill them all.”
The former official said he had been told that President George W. Bush and Vice President Dick Cheney didn’t support such an operation. The effort appeared to die out after about six months, he said.
Former CIA Director George Tenet, who led the agency in the aftermath of the 2001 attacks, declined through a spokesman to comment.
Also in September 2001, as CIA operatives were preparing for an offensive in Afghanistan, officials drafted cables that would have authorized assassinations of specified targets on the spot.
One draft cable, later scrapped, authorized officers on the ground to “kill on sight” certain al Qaeda targets, according to one person who saw it. The context of the memo suggested it was designed for the most senior leaders in al Qaeda, this person said.
Eventually Mr. Bush issued the finding that authorized the capturing of several top al Qaeda leaders, and allowed officers to kill the targets if capturing proved too dangerous or risky.
Lawmakers first learned specifics of the CIA initiative the day after Mr. Panetta did, when he briefed them on it for 45 minutes.
House lawmakers are now making preparations for an investigation into “an important program” and why Congress wasn’t told about it, said Rep. Jan Schakowsky, an Illinois Democrat, in an interview.
On Sunday, lawmakers criticized the Bush administration’s decision not to tell Congress. Senate Intelligence Committee Chairman Dianne Feinstein, a Democrat from California, hinted that the Bush administration may have broken the law by not telling Congress.
“We were kept in the dark. That’s something that should never, ever happen again,” she said. Withholding such information from Congress, she said, “is a big problem, because the law is very clear.”
Ms. Feinstein said Mr. Panetta told the lawmakers that Mr. Cheney had ordered that the information be withheld from Congress. Mr. Cheney on Sunday couldn’t be reached for comment through former White House aides.
The Senate’s second-ranking official, Democratic Sen. Dick Durbin of Illinois, and Vermont Democratic Sen. Patrick Leahy, chairman of the Senate Judiciary Committee, echoed those concerns and called for an investigation, an indication of how the politics of intelligence continue to bedevil the CIA.
Separately, Attorney General Eric Holder is considering whether to order a criminal probe into whether treatment of terrorism detainees exceeded guidelines set by the Justice Department, administration officials said.
President Barack Obama and Mr. Holder have said they don’t favor prosecuting lawyers who wrote legal justifications for interrogation methods that the president and his attorney general have declared to be torture. They have sought to protect CIA officers who followed the legal guidelines.
“The Department of Justice will follow the facts and the law with respect to any matter,” said Matthew Miller, a department spokesman. “We have made no decisions on investigations or prosecutions, including whether to appoint a prosecutor to conduct further inquiry.”
Click here for the full report from the Wall Street Journal.
Egypt Calls for Establishing New World Order to Overcome Crises
July 12, 2009
Crienglish.com
by Cao Jie
Egyptian Assistant Foreign Minister Naela Gabr said Saturday that the world society should make joint efforts to set up a new world order to deal with various crises.
Gabr made the appeal when addressing the senior officials’ meeting of the 15th Non-Aligned Movement (NAM) summit, which opened Saturday in Egyptian Red Sea resort of Sharm el-Sheikh.
The current world situation is quite different from 48 years ago when the NAM was founded, with increasing population, outbreaks of epidemic and deteriorating environment, she said.
The world society should reconsider the international financial system and be more democratic in decision-making so as to avoid the global financial crisis which has hampered the economic growth of developing countries, Gabr said.
She also called for restructuring of international mechanism in health and agriculture in an effort to help overcome the crises in the two areas, referring to global spread of A/H1N1 flu and rising food prices.
Senior officials from over 140 countries gathered here to work out basic documents for the coming NAM summit, which will state the movement’s stance in the current international context on major international and regional issues like the global financial crisis, the Middle East peace process, and the Iranian nuclear issue.
The NAM has played a significant role in protecting rights and interests of its member states, and Egypt, as it will be the rotating chair of the group of pan-developing countries, will endeavor to strengthen its role in the world arena, she added.
Formally founded in September 1961, NAM groups 118 member states, which represents nearly two-thirds of the United Nations’ members, particularly developing countries. It also comprises 55 percent of the world population.
Click here for the full report from Crienglish.com
Chips in Official IDs Raise Privacy Fears
July 12, 2009
My Way News
by Todd Lewan
Climbing into his Volvo, outfitted with a Matrics antenna and a Motorola reader he’d bought on eBay for $190, Chris Paget cruised the streets of San Francisco with this objective: To read the identity cards of strangers, wirelessly, without ever leaving his car.
It took him 20 minutes to strike hacker’s gold.
Zipping past Fisherman’s Wharf, his scanner downloaded to his laptop the unique serial numbers of two pedestrians’ electronic U.S. passport cards embedded with radio frequency identification, or RFID, tags. Within an hour, he’d “skimmed” four more of the new, microchipped PASS cards from a distance of 20 feet.
Increasingly, government officials are promoting the chipping of identity documents as a 21st century application of technology that will help speed border crossings, safeguard credentials against counterfeiters, and keep terrorists from sneaking into the country.
But Paget’s February experiment demonstrated something privacy advocates had feared for years: That RFID, coupled with other technologies, could make people trackable without their knowledge.
He filmed his heist, and soon his video went viral on the Web, intensifying a debate over a push by government, federal and state, to put tracking technologies in identity documents and over their potential to erode privacy.
Putting a traceable RFID in every pocket has the potential to make everybody a blip on someone’s radar screen, critics say, and to redefine Orwellian government snooping for the digital age.
“Little Brother,” some are already calling it – even though elements of the global surveillance web they warn against exist only on drawing boards, neither available nor approved for use.
But with advances in tracking technologies coming at an ever-faster rate, critics say, it won’t be long before governments could be able to identify and track anyone in real time, 24-7, from a cafe in Paris to the shores of California.
On June 1, it became mandatory for Americans entering the United States by land or sea from Canada, Mexico, Bermuda and the Caribbean to present identity documents embedded with RFID tags, though conventional passports remain valid until they expire.
Among new options are the chipped “e-passport,” and the new, electronic PASS card – credit-card sized, with the bearer’s digital photograph and a chip that can be scanned through a pocket, backpack or purse from 30 feet.
Alternatively, travelers can use “enhanced” driver’s licenses embedded with RFID tags now being issued in some border states: Washington, Vermont, Michigan and New York. Texas and Arizona have entered into agreements with the federal government to offer chipped licenses, and the U.S. Department of Homeland Security has recommended expansion to non-border states. Kansas and Florida officials have received DHS briefings on the licenses, agency records show.
The purpose of using RFID is not to identify people, says Mary Ellen Callahan, the chief privacy officer at Homeland Security, but “to verify that the identification document holds valid information about you.”
An RFID document that doubles as a U.S. travel credential “only makes it easier to pull the right record fast enough, to make sure that the border flows, and is operational” – even though a 2005 Government Accountability Office report found that government RFID readers often failed to detect travelers’ tags.
Critics warn that RFID-tagged identities will enable identity thieves and other criminals to commit “contactless” crimes against victims who won’t immediately know they’ve been violated.
Neville Pattinson, vice president for government affairs at Gemalto, Inc., a major supplier of microchipped cards, is no RFID basher. He’s a board member of the Smart Card Alliance, an RFID industry group, and is serving on the Department of Homeland Security’s Data Privacy and Integrity Advisory Committee.
In a 2007 article published by a newsletter for privacy professionals, Pattinson called the chipped cards vulnerable “to attacks from hackers, identity thieves and possibly even terrorists.”
Click here for the full report from My Way News.
Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8
July 10, 2009
By Lyubov Pronina
(Bloomberg) — Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”
“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”
The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.
The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”
Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.
Click here for the full report from Bloomberg.
