Sociology

National Security Agency Is Spying On All American Who Use The Internet and Telephone System and They Collect and Store All Your Communications — Includes Trump and Associates — No Warrant Required If President Obama Designates You A Target — Congress Is Enabling The Turnkey Two Party Tyranny — Warrentless Searches — Congress Does Nothing To Stop It! — Videos

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Obama launched TWO criminal investigations on Trump׃ no evidence found

The O’Reilly Factor March 18, 2017 Fox News Pres Trump March 18, 2017

Edward Snowden Vault 7 ” Wikileaks” Obama Targeting Trump Tower Live from Russia Stream 14 03 2017

Former NSA Employee, Bill Binney, Breaks Silence Confirms Trump Wiretapping claims

NSA WHISTLEBLOWER SAYS TRUMP WAS WIRETAPPED AND MONITORED

NSA Whistleblower William Binney on The Laura Ingraham Show (3/10/2017)

Sean Hannity talks to Mark Levin , Jay Sekulow & Bill Binney about POTUS wiretapping claims

*BOMBSHELL* SEAN HANNITY, WILLIAM BINNEY and TONY SHAFFER (3/8/17) – TALK VAULT 7

Whistleblower: NSA Still Collecting Data On Every U.S. Citizen

william binney ex nsa intelligence agent discusses trump leaks with lou dobbs

Sharyl Attkisson: Presidents CAN authorize ILLEGAL surveillance and nobody would ever know!

Malzberg | Sharyl Attkisson to discuss her new book “Stonewalled” | Part 1

[youtube-https://www.youtube.com/watch?v=OjAoVEhlrPc]

Malzberg | Sharyl Attkisson to discuss her new book “Stonewalled” | Part 2

Wyden: No to warrantless searches by the FBI through National Security Letters

NSA Whistleblower: Everyone in US under virtual surveillance, all info stored, no matter the post

William Binney – The Government is Profiling You (The NSA is Spying on You)

NSA Surveillance and What To Do About It

Taking a Look at the NSA’s Massive Data Center

NSA’s Largest Spy Center Located in Utah (What you need to know)

NSA Whistleblower William Binney: The Future of FREEDOM

‘State of Surveillance’ with Edward Snowden and Shane Smith (FULL EPISODE)

Edward Snowden Full Interview on Trump, Petraeus, & Having ‘No Regrets’

DOCUMENTARY: Edward Snowden – Terminal F (2015)

NSA whistleblower Edward Snowden: ‘I don’t want to live in a society that does these sort of things’

NSA paying US Companies hundreds of millions of dollars for access to data

“You’re Being Watched”: Edward Snowden Emerges as Source Behind Explosive Revelations of NSA Spying

Does the NSA Record Phone Calls? Glenn Greenwald on Warrentless Domestic Surveillance (2007)

Published on Jul 8, 2013

The NSA warrantless surveillance controversy (AKA “Warrantless Wiretapping”) concerns surveillance of persons within the United States during the collection of foreign intelligence by the U.S. National Security Agency (NSA) as part of the war on terror. Under this program, referred to by the Bush administration as the “terrorist surveillance program”, part of the broader President’s Surveillance Program, the NSA was authorized by executive order to monitor, without search warrants, the phone calls, Internet activity (Web, e-mail, etc.), text messaging, and other communication involving any party believed by the NSA to be outside the U.S., even if the other end of the communication lies within the U.S. Critics, however, claimed that it was in an effort to attempt to silence critics of the Bush Administration and their handling of several hot button issues during its tenure. Under public pressure, the Bush administration ceased the warrantless wiretapping program in January 2007 and returned review of surveillance to the FISA court. Subsequently, in 2008 Congress passed the FISA Amendments Act of 2008, which relaxed some of the original FISA court requirements.

During the Obama Administration, the NSA has officially continued operating under the new FISA guidelines. However, in April 2009 officials at the United States Department of Justice acknowledged that the NSA had engaged in “overcollection” of domestic communications in excess of the FISA court’s authority, but claimed that the acts were unintentional and had since been rectified.

All wiretapping of American citizens by the National Security Agency requires a warrant from a three-judge court set up under the Foreign Intelligence Surveillance Act. After the 9/11 attacks, Congress passed the Patriot Act, which granted the President broad powers to fight a war against terrorism. The George W. Bush administration used these powers to bypass the FISA court and directed the NSA to spy directly on al Qaeda in a new NSA electronic surveillance program. Reports at the time indicate that an “apparently accidental” “glitch” resulted in the interception of communications that were purely domestic in nature.[5] This action was challenged by a number of groups, including Congress, as unconstitutional.

The exact scope of the program is not known, but the NSA is or was provided total, unsupervised access to all fiber-optic communications going between some of the nation’s largest telecommunication companies’ major interconnected locations, including phone conversations, email, web browsing, and corporate private network traffic.[6] Critics said that such “domestic” intercepts required FISC authorization under the Foreign Intelligence Surveillance Act.[7] The Bush administration maintained that the authorized intercepts are not domestic but rather foreign intelligence integral to the conduct of war and that the warrant requirements of FISA were implicitly superseded by the subsequent passage of the Authorization for Use of Military Force Against Terrorists (AUMF).[8] FISA makes it illegal to intentionally engage in electronic surveillance under appearance of an official act or to disclose or use information obtained by electronic surveillance under appearance of an official act knowing that it was not authorized by statute; this is punishable with a fine of up to $10,000 or up to five years in prison, or both.[9] In addition, the Wiretap Act prohibits any person from illegally intercepting, disclosing, using or divulging phone calls or electronic communications; this is punishable with a fine or up to five years in prison, or both.[10]

After an article about the program, (which had been code-named Stellar Wind), was published in The New York Times on December 16, 2005, Attorney General Alberto Gonzales confirmed its existence.[11][12][13] The Times had posted the exclusive story on their website the night before, after learning that the Bush administration was considering seeking a Pentagon-Papers-style court injunction to block its publication.[14] Critics of The Times have alleged that executive editor Bill Keller had withheld the story from publication since before the 2004 Presidential election, and that the story that was ultimately published by The Times was essentially the same as reporters James Risen and Eric Lichtblau had submitted in 2004.[15] In a December 2008 interview with Newsweek, former Justice Department employee Thomas Tamm revealed himself to be the initial whistle-blower to The Times. The FBI began investigating leaks about the program in 2005, with 25 agents and 5 prosecutors on the case.

FBI’s Patriot Act Abuse of National Security Letters and illegal NSA spying

If you think you can handle the truth, well here it is folks

National Security Agency

From Wikipedia, the free encyclopedia
“NSA” redirects here. For other uses, see NSA (disambiguation) and National Security Agency (disambiguation).
Not to be confused with NASA or National Security Council.
National Security Agency
Seal of the U.S. National Security Agency.svg

Seal of the National Security Agency
Flag of the U.S. National Security Agency.svg

Flag of the National Security Agency
National Security Agency headquarters, Fort Meade, Maryland.jpg
NSA Headquarters, Fort Meade, Maryland
Agency overview
Formed November 4, 1952; 64 years ago[1]
Preceding agency
  • Armed Forces Security Agency
Headquarters Fort Meade, Maryland, U.S.
39°6′32″N 76°46′17″WCoordinates: 39°6′32″N 76°46′17″W
Motto “Defending Our Nation. Securing The Future.”
Employees Classified (30,000–40,000 estimate)[2][3][4][5]
Annual budget Classified (estimated $10.8 billion, 2013)[6][7]
Agency executives
Parent agency United States Department of Defense
Website www.nsa.gov

The National Security Agency (NSA) is an intelligence organization of the United States federal government responsible for global monitoring, collection, and processing of information and data for foreign intelligence and counterintelligence purposes, a discipline known as signals intelligence (SIGINT). NSA is concurrently charged with protection of U.S. government communications and information systems against penetration and network warfare.[8][9] Although many of NSA’s programs rely on “passive” electronic collection, the agency is authorized to accomplish its mission through active clandestine means,[10] among which are physically bugging electronic systems[11] and allegedly engaging in sabotage through subversive software.[12][13] Moreover, NSA maintains physical presence in a large number of countries across the globe, where its Special Collection Service (SCS) inserts eavesdropping devices in difficult-to-reach places. SCS collection tactics allegedly encompass “close surveillance, burglary, wiretapping, breaking and entering”.[14][15]

Unlike the Defense Intelligence Agency (DIA) and the Central Intelligence Agency (CIA), both of which specialize primarily in foreign human espionage, NSA does not unilaterally conduct human-source intelligence gathering, despite often being portrayed so in popular culture. Instead, NSA is entrusted with assistance to and coordination of SIGINT elements at other government organizations, which are prevented by law from engaging in such activities without the approval of the NSA via the Defense Secretary.[16] As part of these streamlining responsibilities, the agency has a co-located organization called the Central Security Service (CSS), which was created to facilitate cooperation between NSA and other U.S. military cryptanalysis components. Additionally, the NSA Director simultaneously serves as the Commander of the United States Cyber Command and as Chief of the Central Security Service.

Originating as a unit to decipher coded communications in World War II, it was officially formed as the NSA by President Harry S. Truman in 1952. Since then, it has become one of the largest U.S. intelligence organizations in terms of personnel and budget,[6][17] operating as part of the Department of Defense and simultaneously reporting to the Director of National Intelligence.

NSA surveillance has been a matter of political controversy on several occasions, such as its spying on anti-Vietnam-war leaders or economic espionage. In 2013, the extent of some of the NSA’s secret surveillance programs was revealed to the public by Edward Snowden. According to the leaked documents, the NSA intercepts the communications of over a billion people worldwide, many of whom are United States citizens, and tracks the movement of hundreds of millions of people using cellphones. Internationally, research has pointed to the NSA’s ability to surveil the domestic Internet traffic of foreign countries through “boomerang routing”.[18]

Contents

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History

Army predecessor

The origins of the National Security Agency can be traced back to April 28, 1917, three weeks after the U.S. Congress declared war on Germany in World War I. A code and cipher decryption unit was established as the Cable and Telegraph Section which was also known as the Cipher Bureau. It was headquartered in Washington, D.C. and was part of the war effort under the executive branch without direct Congressional authorization. During the course of the war it was relocated in the army’s organizational chart several times. On July 5, 1917, Herbert O. Yardley was assigned to head the unit. At that point, the unit consisted of Yardley and two civilian clerks. It absorbed the navy’s cryptoanalysis functions in July 1918. World War I ended on November 11, 1918, and MI-8 moved to New York City on May 20, 1919, where it continued intelligence activities as the Code Compilation Company under the direction of Yardley.[19][20]

Black Chamber

Western Union allowed MI-8 to monitor telegraphic communications passing through the company’s wires until 1929.[21]

MI-8 also operated the so-called “Black Chamber“.[22] The Black Chamber was located on East 37th Street in Manhattan. Its purpose was to crack the communications codes of foreign governments. Jointly supported by the State Department and the War Department, the chamber persuaded Western Union, the largest U.S. telegram company, to allow government officials to monitor private communications passing through the company’s wires.[23]

Other “Black Chambers” were also found in Europe. They were established by the French and British governments to read the letters of targeted individuals, employing a variety of techniques to surreptitiously open, copy, and reseal correspondence before forwarding it to unsuspecting recipients.[24]

Despite the American Black Chamber’s initial successes, it was shut down in 1929 by U.S. Secretary of State Henry L. Stimson, who defended his decision by stating: “Gentlemen do not read each other’s mail”.[21]

World War II and its aftermath

During World War II, the Signal Security Agency (SSA) was created to intercept and decipher the communications of the Axis powers.[25] When the war ended, the SSA was reorganized as the Army Security Agency (ASA), and it was placed under the leadership of the Director of Military Intelligence.[25]

On May 20, 1949, all cryptologic activities were centralized under a national organization called the Armed Forces Security Agency (AFSA).[25]This organization was originally established within the U.S. Department of Defense under the command of the Joint Chiefs of Staff.[26] The AFSA was tasked to direct Department of Defense communications and electronic intelligence activities, except those of U.S. military intelligence units.[26] However, the AFSA was unable to centralize communications intelligence and failed to coordinate with civilian agencies that shared its interests such as the Department of State, Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI).[26] In December 1951, President Harry S. Truman ordered a panel to investigate how AFSA had failed to achieve its goals. The results of the investigation led to improvements and its redesignation as the National Security Agency.[27]

The agency was formally established by Truman in a memorandum of October 24, 1952, that revised National Security Council Intelligence Directive (NSCID) 9.[28] Since President Truman’s memo was a classified document,[28] the existence of the NSA was not known to the public at that time. Due to its ultra-secrecy the U.S. intelligence community referred to the NSA as “No Such Agency”.[29]

Vietnam War

In the 1960s, the NSA played a key role in expanding America’s commitment to the Vietnam War by providing evidence of a North Vietnamese attack on the American destroyer USS Maddox during the Gulf of Tonkin incident.[30]

A secret operation, code-named “MINARET“, was set up by the NSA to monitor the phone communications of Senators Frank Church and Howard Baker, as well as major civil rights leaders, including Martin Luther King, Jr., and prominent U.S. journalists and athletes who criticized the Vietnam War.[31] However, the project turned out to be controversial, and an internal review by the NSA concluded that its Minaret program was “disreputable if not outright illegal”.[31]

The NSA mounted a major effort to secure tactical communications among U.S. forces during the war with mixed success. The NESTOR family of compatible secure voice systems it developed was widely deployed during the Vietnam War, with about 30,000 NESTOR sets produced. However a variety of technical and operational problems limited their use, allowing the North Vietnamese to exploit intercepted U.S. communications.[32]:Vol I, p.79

Church Committee hearings

Further information: Watergate scandal and Church Committee

In the aftermath of the Watergate scandal, a congressional hearing in 1975 led by Sen. Frank Church[33] revealed that the NSA, in collaboration with Britain’s SIGINT intelligence agency Government Communications Headquarters (GCHQ), had routinely intercepted the international communications of prominent anti-Vietnam war leaders such as Jane Fonda and Dr. Benjamin Spock.[34] Following the resignation of President Richard Nixon, there were several investigations of suspected misuse of FBI, CIA and NSA facilities.[35] Senator Frank Church uncovered previously unknown activity,[35]such as a CIA plot (ordered by the administration of President John F. Kennedy) to assassinate Fidel Castro.[36] The investigation also uncovered NSA’s wiretaps on targeted American citizens.[37]

After the Church Committee hearings, the Foreign Intelligence Surveillance Act of 1978 was passed into law. This was designed to limit the practice of mass surveillance in the United States.[35]

From 1980s to 1990s

In 1986, the NSA intercepted the communications of the Libyan government during the immediate aftermath of the Berlin discotheque bombing. The White House asserted that the NSA interception had provided “irrefutable” evidence that Libya was behind the bombing, which U.S. President Ronald Reagan cited as a justification for the 1986 United States bombing of Libya.[38][39]

In 1999, a multi-year investigation by the European Parliament highlighted the NSA’s role in economic espionage in a report entitled ‘Development of Surveillance Technology and Risk of Abuse of Economic Information’.[40] That year, the NSA founded the NSA Hall of Honor, a memorial at the National Cryptologic Museum in Fort Meade, Maryland.[41] The memorial is a, “tribute to the pioneers and heroes who have made significant and long-lasting contributions to American cryptology”.[41] NSA employees must be retired for more than fifteen years to qualify for the memorial.[41]

NSA’s infrastructure deteriorated in the 1990s as defense budget cuts resulted in maintenance deferrals. On January 24, 2000, NSA headquarters suffered a total network outage for three days caused by an overloaded network. Incoming traffic was successfully stored on agency servers, but it could not be directed and processed. The agency carried out emergency repairs at a cost of $3 million to get the system running again. (Some incoming traffic was also directed instead to Britain’s GCHQ for the time being.) Director Michael Hayden called the outage a “wake-up call” for the need to invest in the agency’s infrastructure.[42]

War on Terror

After Osama bin Laden moved to Afghanistan in the 1980s, the NSA recorded all of his phone calls via satellite, logging over 2,000 minutes of conversation[43]

In the aftermath of the September 11 attacks, the NSA created new IT systems to deal with the flood of information from new technologies like the Internet and cellphones. ThinThread contained advanced data mining capabilities. It also had a “privacy mechanism”; surveillance was stored encrypted; decryption required a warrant. The research done under this program may have contributed to the technology used in later systems. ThinThread was cancelled when Michael Hayden chose Trailblazer, which did not include ThinThread’s privacy system.[44]

Trailblazer Project ramped up in 2002. SAIC, Boeing, CSC, IBM, and Litton worked on it. Some NSA whistleblowers complained internally about major problems surrounding Trailblazer. This led to investigations by Congress and the NSA and DoD Inspectors General. The project was cancelled in early 2004. Several whistleblowers were later arrested and charged with violating federal espionage laws.

Turbulence started in 2005. It was developed in small, inexpensive “test” pieces, rather than one grand plan like Trailblazer. It also included offensive cyber-warfare capabilities, like injecting malware into remote computers. Congress criticized Turbulence in 2007 for having similar bureaucratic problems as Trailblazer.[45] It was to be a realization of information processing at higher speeds in cyberspace.[46]

Global surveillance disclosures

The massive extent of the NSA’s spying, both foreign and domestic, was revealed to the public in a series of detailed disclosures of internal NSA documents beginning in June 2013. Most of the disclosures were leaked by former NSA contractor, Edward Snowden.

Scope of surveillance

It was revealed that the NSA intercepts telephone and Internet communications of over a billion people worldwide, seeking information on terrorism as well as foreign politics, economics[47] and “commercial secrets”.[48] In a declassified document it was revealed that 17,835 phone lines were on an improperly permitted “alert list” from 2006 to 2009 in breach of compliance, which tagged these phone lines for daily monitoring.[49][50][51] Eleven percent of these monitored phone lines met the agency’s legal standard for “reasonably articulable suspicion” (RAS).[49][52]

A dedicated unit of the NSA locates targets for the CIA for extrajudicial assassination in the Middle East.[53] The NSA has also spied extensively on the European Union, the United Nations and numerous governments including allies and trading partners in Europe, South America and Asia.[54][55]

The NSA tracks the locations of hundreds of millions of cellphones per day, allowing it to map people’s movements and relationships in detail.[56]It reportedly has access to all communications made via Google, Microsoft, Facebook, Yahoo, YouTube, AOL, Skype, Apple and Paltalk,[57] and collects hundreds of millions of contact lists from personal email and instant messaging accounts each year.[58] It has also managed to weaken much of the encryption used on the Internet (by collaborating with, coercing or otherwise infiltrating numerous technology companies), so that the majority of Internet privacy is now vulnerable to the NSA and other attackers.[59][60]

Domestically, the NSA collects and stores metadata records of phone calls,[61] including over 120 million US Verizon subscribers,[62] as well as Internet communications,[57] relying on a secret interpretation of the Patriot Act whereby the entirety of US communications may be considered “relevant” to a terrorism investigation if it is expected that even a tiny minority may relate to terrorism.[63] The NSA supplies foreign intercepts to the DEA, IRS and other law enforcement agencies, who use these to initiate criminal investigations. Federal agents are then instructed to “recreate” the investigative trail via parallel construction.[64]

The NSA also spies on influential Muslims to obtain information that could be used to discredit them, such as their use of pornography. The targets, both domestic and abroad, are not suspected of any crime but hold religious or political views deemed “radical” by the NSA.[65]

Although NSA’s surveillance activities are controversial, government agencies and private enterprises have common needs, and sometimes cooperate at subtle and complex technical levels. Big data is becoming more advantageous, justifying the cost of required computer hardware, and social media lead the trend. The interests of NSA and Silicon Valley began to converge as advances in computer storage technology drastically reduced the costs of storing enormous amounts of data and at the same time the value of the data for use in consumer marketing began to rise. On the other hand, social media sites are growing as voluntary data mining operations on a scale that rivals or exceeds anything the government could attempt on its own.[66]

According to a report in The Washington Post in July 2014, relying on information provided by Snowden, 90% of those placed under surveillance in the U.S. are ordinary Americans, and are not the intended targets. The newspaper said it had examined documents including emails, text messages, and online accounts that support the claim.[67]

Legal accountability

Despite President Obama’s claims that these programs have congressional oversight, members of Congress were unaware of the existence of these NSA programs or the secret interpretation of the Patriot Act, and have consistently been denied access to basic information about them.[68] Obama has also claimed that there are legal checks in place to prevent inappropriate access of data and that there have been no examples of abuse;[69] however, the secret FISC court charged with regulating the NSA’s activities is, according to its chief judge, incapable of investigating or verifying how often the NSA breaks even its own secret rules.[70] It has since been reported that the NSA violated its own rules on data access thousands of times a year, many of these violations involving large-scale data interceptions;[71] and that NSA officers have even used data intercepts to spy on love interests.[72] The NSA has “generally disregarded the special rules for disseminating United States person information” by illegally sharing its intercepts with other law enforcement agencies.[73] A March 2009 opinion of the FISC court, released by court order, states that protocols restricting data queries had been “so frequently and systemically violated that it can be fairly said that this critical element of the overall … regime has never functioned effectively.”[74][75] In 2011 the same court noted that the “volume and nature” of the NSA’s bulk foreign Internet intercepts was “fundamentally different from what the court had been led to believe”.[73] Email contact lists (including those of US citizens) are collected at numerous foreign locations to work around the illegality of doing so on US soil.[58]

Legal opinions on the NSA’s bulk collection program have differed. In mid-December 2013, U.S. District Court Judge Richard Leon ruled that the “almost-Orwellian” program likely violates the Constitution, and wrote, “I cannot imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systematic and high-tech collection and retention of personal data on virtually every single citizen for purposes of querying and analyzing it without prior judicial approval. Surely, such a program infringes on ‘that degree of privacy’ that the Founders enshrined in the Fourth Amendment. Indeed, I have little doubt that the author of our Constitution, James Madison, who cautioned us to beware ‘the abridgement of freedom of the people by gradual and silent encroachments by those in power,’ would be aghast.”[76]

Later that month, U.S. District Judge William Pauley ruled that the NSA’s collection of telephone records is legal and valuable in the fight against terrorism. In his opinion, he wrote, “a bulk telephony metadata collection program [is] a wide net that could find and isolate gossamer contacts among suspected terrorists in an ocean of seemingly disconnected data” and noted that a similar collection of data prior to 9/11 might have prevented the attack.[77]

An October 2014 United Nations report condemned mass surveillance by the United States and other countries as violating multiple international treaties and conventions that guarantee core privacy rights.[78]

Official responses

On March 20, 2013 the Director of National Intelligence, Lieutenant General James Clapper, testified before Congress that the NSA does not wittingly collect any kind of data on millions or hundreds of millions of Americans, but he retracted this in June after details of the PRISM program were published, and stated instead that meta-data of phone and Internet traffic are collected, but no actual message contents.[79] This was corroborated by the NSA Director, General Keith Alexander, before it was revealed that the XKeyscore program collects the contents of millions of emails from US citizens without warrant, as well as “nearly everything a user does on the Internet”. Alexander later admitted that “content” is collected, but stated that it is simply stored and never analyzed or searched unless there is “a nexus to al-Qaida or other terrorist groups”.[69]

Regarding the necessity of these NSA programs, Alexander stated on June 27 that the NSA’s bulk phone and Internet intercepts had been instrumental in preventing 54 terrorist “events”, including 13 in the US, and in all but one of these cases had provided the initial tip to “unravel the threat stream”.[80] On July 31 NSA Deputy Director John Inglis conceded to the Senate that these intercepts had not been vital in stopping any terrorist attacks, but were “close” to vital in identifying and convicting four San Diego men for sending US$8,930 to Al-Shabaab, a militia that conducts terrorism in Somalia.[81][82][83]

The U.S. government has aggressively sought to dismiss and challenge Fourth Amendment cases raised against it, and has granted retroactive immunity to ISPs and telecoms participating in domestic surveillance.[84][85] The U.S. military has acknowledged blocking access to parts of The Guardian website for thousands of defense personnel across the country,[86][87] and blocking the entire Guardian website for personnel stationed throughout Afghanistan, the Middle East, and South Asia.[88]

Organizational structure

Michael S. Rogers, the director of the NSA.

The NSA is led by the Director of the National Security Agency (DIRNSA), who also serves as Chief of the Central Security Service (CHCSS) and Commander of the United States Cyber Command (USCYBERCOM) and is the highest-ranking military official of these organizations. He is assisted by a Deputy Director, who is the highest-ranking civilian within the NSA/CSS.

NSA also has an Inspector General, head of the Office of the Inspector General (OIG), a General Counsel, head of the Office of the General Counsel (OGC) and a Director of Compliance, who is head of the Office of the Director of Compliance (ODOC).[89]

Unlike other intelligence organizations such as CIA or DIA, NSA has always been particularly reticent concerning its internal organizational structure.

As of the mid-1990s, the National Security Agency was organized into five Directorates:

  • The Operations Directorate, which was responsible for SIGINT collection and processing.
  • The Technology and Systems Directorate, which develops new technologies for SIGINT collection and processing.
  • The Information Systems Security Directorate, which was responsible for NSA’s communications and information security missions.
  • The Plans, Policy and Programs Directorate, which provided staff support and general direction for the Agency.
  • The Support Services Directorate, which provided logistical and administrative support activities.[90]

Each of these directorates consisted of several groups or elements, designated by a letter. There were for example the A Group, which was responsible for all SIGINT operations against the Soviet Union and Eastern Europe, and G Group, which was responsible for SIGINT related to all non-communist countries. These groups were divided in units designated by an additional number, like unit A5 for breaking Soviet codes, and G6, being the office for the Middle East, North Africa, Cuba, Central and South America.[91][92]

Structure

As of 2013, NSA has about a dozen directorates, which are designated by a letter, although not all of them are publicly known. The directorates are divided in divisions and units starting with the letter of the parent directorate, followed by a number for the division, the sub-unit or a sub-sub-unit.

The main elements of the organizational structure of the NSA are:[93]

  • F – Directorate only known from unit F6, the Special Collection Service (SCS), which is a joint program created by CIA and NSA in 1978 to facilitate clandestine activities such as bugging computers throughout the world, using the expertise of both agencies.[94]
  • G – Directorate only known from unit G112, the office that manages the Senior Span platform, attached to the U2 spy planes.[95]
  • I – Information Assurance Directorate (IAD), which ensures availability, integrity, authentication, confidentiality, and non-repudiation of national security and telecommunications and information systems (national security systems).
  • J – Directorate only known from unit J2, the Cryptologic Intelligence Unit
  • L – Installation and Logistics
  • M – Human Resources
  • Q – Security and Counterintelligence
  • R – Research Directorate, which conducts research on signals intelligence and on information assurance for the U.S. Government.[96]
  • S – Signals Intelligence Directorate (SID), which is responsible for the collection, analysis, production and dissemination of signals intelligence. This directorate is led by a director and a deputy director. The SID consists of the following divisions:
    • S1 – Customer Relations
    • S2 – Analysis and Production Centers, with the following so-called Product Lines:
      • S2A: South Asia, S2B: China and Korea, S2C: International Security, S2E: Middle East/Asia, S2F: International Crime, S2G: Counter-proliferation, S2H: Russia, S2I: Counter-terrorism, S2J: Weapons and Space, S2T: Current Threats
    • S3 – Data Acquisition, with these divisions for the main collection programs:
      • S31 – Cryptanalysis and Exploitation Services (CES)
      • S32 – Tailored Access Operations (TAO), which hacks into foreign computers to conduct cyber-espionage and reportedly is “the largest and arguably the most important component of the NSA’s huge Signal Intelligence (SIGINT) Directorate, consisting of over 1,000 military and civilian computer hackers, intelligence analysts, targeting specialists, computer hardware and software designers, and electrical engineers.”[97]
      • S33 – Global Access Operations (GAO), which is responsible for intercepts from satellites and other international SIGINT platforms.[98] A tool which details and maps the information collected by this unit is code-named Boundless Informant.
      • S34 – Collections Strategies and Requirements Center
      • S35 – Special Source Operations (SSO), which is responsible for domestic and compartmented collection programs, like for example the PRISM program.[98] Special Source Operations is also mentioned in connection to the FAIRVIEW collection program.[99]
  • T – Technical Directorate (TD)
  • Directorate for Education and Training
  • Directorate for Corporate Leadership
  • Foreign Affairs Directorate, which acts as liaison with foreign intelligence services, counter-intelligence centers and the UKUSA-partners.
  • Acquisitions and Procurement Directorate
  • Information Sharing Services (ISS), led by a chief and a deputy chief.[100]

In the year 2000, a leadership team was formed, consisting of the Director, the Deputy Director and the Directors of the Signals Intelligence (SID), the Information Assurance (IAD) and the Technical Directorate (TD). The chiefs of other main NSA divisions became associate directors of the senior leadership team.[101]

After president George W. Bush initiated the President’s Surveillance Program (PSP) in 2001, the NSA created a 24-hour Metadata Analysis Center (MAC), followed in 2004 by the Advanced Analysis Division (AAD), with the mission of analyzing content, Internet metadata and telephone metadata. Both units were part of the Signals Intelligence Directorate.[102]

A 2016 proposal would combine the Signals Intelligence Directorate with the Information Assurance Directorate into a Directorate of Operations.[103]

Watch centers

The NSA maintains at least two watch centers:

  • National Security Operations Center (NSOC), which is the NSA’s current operations center and focal point for time-sensitive SIGINT reporting for the United States SIGINT System (USSS). This center was established in 1968 as the National SIGINT Watch Center (NSWC) and renamed into National SIGINT Operations Center (NSOC) in 1973. This “nerve center of the NSA” got its current name in 1996.[104]
  • NSA/CSS Threat Operations Center (NTOC), which is the primary NSA/CSS partner for Department of Homeland Security response to cyber incidents. The NTOC establishes real-time network awareness and threat characterization capabilities to forecast, alert, and attribute malicious activity and enable the coordination of Computer Network Operations. The NTOC was established in 2004 as a joint Information Assurance and Signals Intelligence project.[105]

Employees

The number of NSA employees is officially classified[4] but there are several sources providing estimates. In 1961, NSA had 59,000 military and civilian employees, which grew to 93,067 in 1969, of which 19,300 worked at the headquarters at Fort Meade. In the early 1980s NSA had roughly 50,000 military and civilian personnel. By 1989 this number had grown again to 75,000, of which 25,000 worked at the NSA headquarters. Between 1990 and 1995 the NSA’s budget and workforce were cut by one third, which led to a substantial loss of experience.[106]

In 2012, the NSA said more than 30,000 employees worked at Fort Meade and other facilities.[2] In 2012, John C. Inglis, the deputy director, said that the total number of NSA employees is “somewhere between 37,000 and one billion” as a joke,[4] and stated that the agency is “probably the biggest employer of introverts.”[4] In 2013 Der Spiegel stated that the NSA had 40,000 employees.[5] More widely, it has been described as the world’s largest single employer of mathematicians.[107] Some NSA employees form part of the workforce of the National Reconnaissance Office (NRO), the agency that provides the NSA with satellite signals intelligence.

As of 2013 about 1,000 system administrators work for the NSA.[108]

Security issues

The NSA received criticism early on in 1960 after two agents had defected to the Soviet Union. Investigations by the House Un-American Activities Committee and a special subcommittee of the United States House Committee on Armed Services revealed severe cases of ignorance in personnel security regulations, prompting the former personnel director and the director of security to step down and leading to the adoption of stricter security practices.[109] Nonetheless, security breaches reoccurred only a year later when in an issue of Izvestia of July 23, 1963, a former NSA employee published several cryptologic secrets.

The very same day, an NSA clerk-messenger committed suicide as ongoing investigations disclosed that he had sold secret information to the Soviets on a regular basis. The reluctance of Congressional houses to look into these affairs had prompted a journalist to write, “If a similar series of tragic blunders occurred in any ordinary agency of Government an aroused public would insist that those responsible be officially censured, demoted, or fired.” David Kahn criticized the NSA’s tactics of concealing its doings as smug and the Congress’ blind faith in the agency’s right-doing as shortsighted, and pointed out the necessity of surveillance by the Congress to prevent abuse of power.[109]

Edward Snowden‘s leaking of the existence of PRISM in 2013 caused the NSA to institute a “two-man rule“, where two system administrators are required to be present when one accesses certain sensitive information.[108] Snowden claims he suggested such a rule in 2009.[110]

Polygraphin

Defense Security Service (DSS) polygraph brochure given to NSA applicants

The NSA conducts polygraph tests of employees. For new employees, the tests are meant to discover enemy spies who are applying to the NSA and to uncover any information that could make an applicant pliant to coercion.[111] As part of the latter, historically EPQs or “embarrassing personal questions” about sexual behavior had been included in the NSA polygraph.[111] The NSA also conducts five-year periodic reinvestigation polygraphs of employees, focusing on counterintelligence programs. In addition the NSA conducts periodic polygraph investigations in order to find spies and leakers; those who refuse to take them may receive “termination of employment”, according to a 1982 memorandum from the director of the NSA.[112]

File:NSApolygraphvideo.webm

NSA-produced video on the polygraph process

There are also “special access examination” polygraphs for employees who wish to work in highly sensitive areas, and those polygraphs cover counterintelligence questions and some questions about behavior.[112] NSA’s brochure states that the average test length is between two and four hours.[113] A 1983 report of the Office of Technology Assessment stated that “It appears that the NSA [National Security Agency] (and possibly CIA) use the polygraph not to determine deception or truthfulness per se, but as a technique of interrogation to encourage admissions.”[114]Sometimes applicants in the polygraph process confess to committing felonies such as murder, rape, and selling of illegal drugs. Between 1974 and 1979, of the 20,511 job applicants who took polygraph tests, 695 (3.4%) confessed to previous felony crimes; almost all of those crimes had been undetected.[111]

In 2010 the NSA produced a video explaining its polygraph process.[115] The video, ten minutes long, is titled “The Truth About the Polygraph” and was posted to the Web site of the Defense Security Service. Jeff Stein of The Washington Post said that the video portrays “various applicants, or actors playing them — it’s not clear — describing everything bad they had heard about the test, the implication being that none of it is true.”[116] AntiPolygraph.org argues that the NSA-produced video omits some information about the polygraph process; it produced a video responding to the NSA video.[115] George Maschke, the founder of the Web site, accused the NSA polygraph video of being “Orwellian“.[116]

After Edward Snowden revealed his identity in 2013, the NSA began requiring polygraphing of employees once per quarter.[117]

Arbitrary firing

The number of exemptions from legal requirements has been criticized. When in 1964 the Congress was hearing a bill giving the director of the NSA the power to fire at will any employee,The Washington Post wrote: “This is the very definition of arbitrariness. It means that an employee could be discharged and disgraced on the basis of anonymous allegations without the slightest opportunity to defend himself.” Yet, the bill was accepted by an overwhelming majority.[109]

Insignia and memorials

Seal of the U.S. National Security Agency.svg

The heraldic insignia of NSA consists of an eagle inside a circle, grasping a key in its talons.[118] The eagle represents the agency’s national mission.[118] Its breast features a shield with bands of red and white, taken from the Great Seal of the United States and representing Congress.[118] The key is taken from the emblem of Saint Peter and represents security.[118]

When the NSA was created, the agency had no emblem and used that of the Department of Defense.[119] The agency adopted its first of two emblems in 1963.[119] The current NSA insignia has been in use since 1965, when then-Director, LTG Marshall S. Carter (USA) ordered the creation of a device to represent the agency.[120]

The NSA’s flag consists of the agency’s seal on a light blue background.

National Cryptologic Memorial

Crews associated with NSA missions have been involved in a number of dangerous and deadly situations.[121] The USS Liberty incident in 1967 and USS Pueblo incident in 1968 are examples of the losses endured during the Cold War.[121]

The National Security Agency/Central Security Service Cryptologic Memorial honors and remembers the fallen personnel, both military and civilian, of these intelligence missions.[122] It is made of black granite, and has 171 names carved into it, as of 2013 .[122] It is located at NSA headquarters. A tradition of declassifying the stories of the fallen was begun in 2001.[122]

NSANet (NSA’s intranet)

Behind the Green Door – Secure communications room with separate computer terminals for access to SIPRNET, GWAN, NSANET, and JWICS

NSANet stands for National Security Agency Network and is the official NSA intranet.[123] It is a classified network,[124] for information up to the level of TS/SCI[125] to support the use and sharing of intelligence data between NSA and the signals intelligence agencies of the four other nations of the Five Eyes partnership. The management of NSANet has been delegated to the Central Security Service Texas (CSSTEXAS).[126]

NSANet is a highly secured computer network consisting of fiber-optic and satellite communication channels which are almost completely separated from the public Internet. The network allows NSA personnel and civilian and military intelligence analysts anywhere in the world to have access to the agency’s systems and databases. This access is tightly controlled and monitored. For example, every keystroke is logged, activities are audited at random and downloading and printing of documents from NSANet are recorded.[127]

In 1998, NSANet, along with NIPRNET and SIPRNET, had “significant problems with poor search capabilities, unorganized data and old information”.[128] In 2004, the network was reported to have used over twenty commercial off-the-shelf operating systems.[129] Some universities that do highly sensitive research are allowed to connect to it.[130]

The thousands of Top Secret internal NSA documents that were taken by Edward Snowden in 2013 were stored in “a file-sharing location on the NSA’s intranet site” so they could easily be read online by NSA personnel. Everyone with a TS/SCI-clearance had access to these documents and as a system administrator, Snowden was responsible for moving accidentally misplaced highly sensitive documents to more secure storage locations.[131]

National Computer Security Center

The DoD Computer Security Center was founded in 1981 and renamed the National Computer Security Center (NCSC) in 1985. NCSC was responsible for computer security throughout the federal government.[132] NCSC was part of NSA,[133] and during the late 1980s and the 1990s, NSA and NCSC published Trusted Computer System Evaluation Criteria in a six-foot high Rainbow Series of books that detailed trusted computing and network platform specifications.[134] The Rainbow books were replaced by the Common Criteria, however, in the early 2000s.[134]

Facilities

Headquarters

National Security Agency headquarters in Fort Meade, 2013

Headquarters for the National Security Agency is located at 39°6′32″N 76°46′17″W in Fort George G. Meade, Maryland, although it is separate from other compounds and agencies that are based within this same military installation. Ft. Meade is about 20 mi (32 km) southwest of Baltimore,[135] and 25 mi (40 km) northeast of Washington, DC.[136] The NSA has its own exit off Maryland Route 295 South labeled “NSA Employees Only”.[137][138] The exit may only be used by people with the proper clearances, and security vehicles parked along the road guard the entrance.[139]

NSA is the largest employer in the U.S. state of Maryland, and two-thirds of its personnel work at Ft. Meade.[140] Built on 350 acres (140 ha; 0.55 sq mi)[141] of Ft. Meade’s 5,000 acres (2,000 ha; 7.8 sq mi),[142] the site has 1,300 buildings and an estimated 18,000 parking spaces.[136][143]

NSA headquarters building in Fort Meade (left), NSOC (right)

The main NSA headquarters and operations building is what James Bamford, author of Body of Secrets, describes as “a modern boxy structure” that appears similar to “any stylish office building.”[144] The building is covered with one-way dark glass, which is lined with copper shielding in order to prevent espionage by trapping in signals and sounds.[144] It contains 3,000,000 square feet (280,000 m2), or more than 68 acres (28 ha), of floor space; Bamford said that the U.S. Capitol “could easily fit inside it four times over.”[144]

The facility has over 100 watchposts,[145] one of them being the visitor control center, a two-story area that serves as the entrance.[144] At the entrance, a white pentagonal structure,[146] visitor badges are issued to visitors and security clearances of employees are checked.[147] The visitor center includes a painting of the NSA seal.[146]

The OPS2A building, the tallest building in the NSA complex and the location of much of the agency’s operations directorate, is accessible from the visitor center. Bamford described it as a “dark glass Rubik’s Cube“.[148] The facility’s “red corridor” houses non-security operations such as concessions and the drug store. The name refers to the “red badge” which is worn by someone without a security clearance. The NSA headquarters includes a cafeteria, a credit union, ticket counters for airlines and entertainment, a barbershop, and a bank.[146] NSA headquarters has its own post office, fire department, and police force.[149][150][151]

The employees at the NSA headquarters reside in various places in the Baltimore-Washington area, including Annapolis, Baltimore, and Columbia in Maryland and the District of Columbia, including the Georgetown community.[152]

Power consumption

Due to massive amounts of data processing, NSA is the largest electricity consumer in Maryland.[140]

Following a major power outage in 2000, in 2003 and in follow-ups through 2007, The Baltimore Sun reported that the NSA was at risk of electrical overload because of insufficient internal electrical infrastructure at Fort Meade to support the amount of equipment being installed. This problem was apparently recognized in the 1990s but not made a priority, and “now the agency’s ability to keep its operations going is threatened.”[153]

Baltimore Gas & Electric (BGE, now Constellation Energy) provided NSA with 65 to 75 megawatts at Ft. Meade in 2007, and expected that an increase of 10 to 15 megawatts would be needed later that year.[154] In 2011, NSA at Ft. Meade was Maryland’s largest consumer of power.[140] In 2007, as BGE’s largest customer, NSA bought as much electricity as Annapolis, the capital city of Maryland.[153]

One estimate put the potential for power consumption by the new Utah Data Center at US$40 million per year.[155]

History of headquarters

Headquarters at Fort Meade circa 1950s

When the agency was established, its headquarters and cryptographic center were in the Naval Security Station in Washington, D.C. The COMINT functions were located in Arlington Hall in Northern Virginia, which served as the headquarters of the U.S. Army‘s cryptographic operations.[156]Because the Soviet Union had detonated a nuclear bomb and because the facilities were crowded, the federal government wanted to move several agencies, including the AFSA/NSA. A planning committee considered Fort Knox, but Fort Meade, Maryland, was ultimately chosen as NSA headquarters because it was far enough away from Washington, D.C. in case of a nuclear strike and was close enough so its employees would not have to move their families.[157]

Construction of additional buildings began after the agency occupied buildings at Ft. Meade in the late 1950s, which they soon outgrew.[157] In 1963 the new headquarters building, nine stories tall, opened. NSA workers referred to the building as the “Headquarters Building” and since the NSA management occupied the top floor, workers used “Ninth Floor” to refer to their leaders.[158] COMSEC remained in Washington, D.C., until its new building was completed in 1968.[157] In September 1986, the Operations 2A and 2B buildings, both copper-shielded to prevent eavesdropping, opened with a dedication by President Ronald Reagan.[159] The four NSA buildings became known as the “Big Four.”[159] The NSA director moved to 2B when it opened.[159]

Fort Meade shooting[edit]

On March 30, 2015, shortly before 9 am, a stolen sports utility vehicle approached an NSA police vehicle blocking the road near the gate of Fort Meade, after it was told to leave the area. NSA officers fired on the SUV, killing the 27-year-old driver, Ricky Hall (a transgender person also known as Mya), and seriously injuring his 20-year-old male passenger. An NSA officer’s arm was injured when Hall subsequently crashed into his vehicle.[160][161]

The two, dressed in women’s clothing after a night of partying at a motel with the man they’d stolen the SUV from that morning, “attempted to drive a vehicle into the National Security Agency portion of the installation without authorization”, according to an NSA statement.[162] FBI spokeswoman Amy Thoreson said the incident is not believed to be related to terrorism.[163]In June 2015 the FBI closed its investigation into the incident and federal prosecutors have declined to bring charges against anyone involved.[164]

An anonymous police official told The Washington Post, “This was not a deliberate attempt to breach the security of NSA. This was not a planned attack.” The two are believed to have made a wrong turn off the highway, while fleeing from the motel after stealing the vehicle. A small amount of cocaine was found in the SUV. A local CBS reporter initially said a gun was found,[165]but her later revision does not.[166] Dozens of journalists were corralled into a parking lot blocks away from the scene, and were barred from photographing the area.[167]

Computing[edit]

In 1995, The Baltimore Sun reported that the NSA is the owner of the single largest group of supercomputers.[168]

NSA held a groundbreaking ceremony at Ft. Meade in May 2013 for its High Performance Computing Center 2, expected to open in 2016.[169] Called Site M, the center has a 150 megawatt power substation, 14 administrative buildings and 10 parking garages.[149] It cost $3.2 billion and covers 227 acres (92 ha; 0.355 sq mi).[149] The center is 1,800,000 square feet (17 ha; 0.065 sq mi)[149] and initially uses 60 megawatts of electricity.[170]

Increments II and III are expected to be completed by 2030, and would quadruple the space, covering 5,800,000 square feet (54 ha; 0.21 sq mi) with 60 buildings and 40 parking garages.[149] Defense contractors are also establishing or expanding cybersecurity facilities near the NSA and around the Washington metropolitan area.[149]

Other U.S. facilities

Buckley Air Force Base in Colorado

Utah Data Center

As of 2012, NSA collected intelligence from four geostationary satellites.[155] Satellite receivers were at Roaring Creek Station in Catawissa, Pennsylvania and Salt Creek Station in Arbuckle, California.[155] It operated ten to twenty taps on U.S. telecom switches. NSA had installations in several U.S. states and from them observed intercepts from Europe, the Middle East, North Africa, Latin America, and Asia.[155]

NSA had facilities at Friendship Annex (FANX) in Linthicum, Maryland, which is a 20 to 25-minute drive from Ft. Meade;[171] the Aerospace Data Facility at Buckley Air Force Base in Aurora outside Denver, Colorado; NSA Texas in the Texas Cryptology Center at Lackland Air Force Base in San Antonio, Texas; NSA Georgia at Fort Gordon in Augusta, Georgia; NSA Hawaii in Honolulu; the Multiprogram Research Facility in Oak Ridge, Tennessee, and elsewhere.[152][155]

On January 6, 2011 a groundbreaking ceremony was held to begin construction on NSA’s first Comprehensive National Cyber-security Initiative (CNCI) Data Center, known as the “Utah Data Center” for short. The $1.5B data center is being built at Camp Williams, Utah, located 25 miles (40 km) south of Salt Lake City, and will help support the agency’s National Cyber-security Initiative.[172] It is expected to be operational by September 2013.[155]

In 2009, to protect its assets and to access more electricity, NSA sought to decentralize and expand its existing facilities in Ft. Meade and Menwith Hill,[173] the latter expansion expected to be completed by 2015.[174]

The Yakima Herald-Republic cited Bamford, saying that many of NSA’s bases for its Echelon program were a legacy system, using outdated, 1990s technology.[175] In 2004, NSA closed its operations at Bad Aibling Station (Field Station 81) in Bad Aibling, Germany.[176] In 2012, NSA began to move some of its operations at Yakima Research Station, Yakima Training Center, in Washington state to Colorado, planning to leave Yakima closed.[177] As of 2013, NSA also intended to close operations at Sugar Grove, West Virginia.[175]

International stations

RAF Menwith Hill has the largest NSA presence in the United Kingdom.[174]

Following the signing in 1946–1956[178] of the UKUSA Agreement between the United States, United Kingdom, Canada, Australia and New Zealand, who then cooperated on signals intelligence and ECHELON,[179] NSA stations were built at GCHQ Bude in Morwenstow, United Kingdom; Geraldton, Pine Gap and Shoal Bay, Australia; Leitrim and Ottawa, Canada; Misawa, Japan; and Waihopai and Tangimoana,[180] New Zealand.[181]

NSA operates RAF Menwith Hill in North Yorkshire, United Kingdom, which was, according to BBC News in 2007, the largest electronic monitoring station in the world.[182] Planned in 1954, and opened in 1960, the base covered 562 acres (227 ha; 0.878 sq mi) in 1999.[183]

The agency’s European Cryptologic Center (ECC), with 240 employees in 2011, is headquartered at a US military compound in Griesheim, near Frankfurt in Germany. A 2011 NSA report indicates that the ECC is responsible for the “largest analysis and productivity in Europe” and focusses on various priorities, including Africa, Europe, the Middle East and counterterrorism operations.[184]

In 2013, a new Consolidated Intelligence Center, also to be used by NSA, is being built at the headquarters of the United States Army Europe in Wiesbaden, Germany.[185] NSA’s partnership with Bundesnachrichtendienst (BND), the German foreign intelligence service, was confirmed by BND president Gerhard Schindler.[185]

Thailand

Thailand is a “3rd party partner” of the NSA along with nine other nations.[186] These are non-English-speaking countries that have made security agreements for the exchange of SIGINT raw material and end product reports.

Thailand is the site of at least two US SIGINT collection stations. One is at the US Embassy in Bangkok, a joint NSA-CIA Special Collection Service (SCS) unit. It presumably eavesdrops on foreign embassies, governmental communications, and other targets of opportunity.[187]

The second installation is a FORNSAT (foreign satellite interception) station in the Thai city of Khon Kaen. It is codenamed INDRA, but has also been referred to as LEMONWOOD.[187] The station is approximately 40 ha (100 acres) in size and consists of a large 3,700–4,600 m2 (40,000–50,000 ft2) operations building on the west side of the ops compound and four radome-enclosed parabolic antennas. Possibly two of the radome-enclosed antennas are used for SATCOM intercept and two antennas used for relaying the intercepted material back to NSA. There is also a PUSHER-type circularly-disposed antenna array (CDAA) array just north of the ops compound.[188][189]

NSA activated Khon Kaen in October 1979. Its mission was to eavesdrop on the radio traffic of Chinese army and air force units in southern China, especially in and around the city of Kunming in Yunnan Province. Back in the late 1970s the base consisted only of a small CDAA antenna array that was remote-controlled via satellite from the NSA listening post at Kunia, Hawaii, and a small force of civilian contractors from Bendix Field Engineering Corp. whose job it was to keep the antenna array and satellite relay facilities up and running 24/7.[188]

According to the papers of the late General William Odom, the INDRA facility was upgraded in 1986 with a new British-made PUSHER CDAA antenna as part of an overall upgrade of NSA and Thai SIGINT facilities whose objective was to spy on the neighboring communist nations of Vietnam, Laos, and Cambodia.[188]

The base apparently fell into disrepair in the 1990s as China and Vietnam became more friendly towards the US, and by 2002 archived satellite imagery showed that the PUSHER CDAA antenna had been torn down, perhaps indicating that the base had been closed. At some point in the period since 9/11, the Khon Kaen base was reactivated and expanded to include a sizeable SATCOM intercept mission. It is likely that the NSA presence at Khon Kaen is relatively small, and that most of the work is done by civilian contractors.[188]

Mission

NSA’s eavesdropping mission includes radio broadcasting, both from various organizations and individuals, the Internet, telephone calls, and other intercepted forms of communication. Its secure communications mission includes military, diplomatic, and all other sensitive, confidential or secret government communications.[190]

According to the Washington Post, “[e]very day, collection systems at the National Security Agency intercept and store 1.7 billion e-mails, phone calls and other types of communications. The NSA sorts a fraction of those into 70 separate databases.”[191]

Because of its listening task, NSA/CSS has been heavily involved in cryptanalytic research, continuing the work of predecessor agencies which had broken many World War II codes and ciphers (see, for instance, Purple, Venona project, and JN-25).

In 2004, NSA Central Security Service and the National Cyber Security Division of the Department of Homeland Security (DHS) agreed to expand NSA Centers of Academic Excellence in Information Assurance Education Program.[192]

As part of the National Security Presidential Directive 54/Homeland Security Presidential Directive 23 (NSPD 54), signed on January 8, 2008 by President Bush, the NSA became the lead agency to monitor and protect all of the federal government’s computer networks from cyber-terrorism.[9]

Operations

Operations by the National Security Agency can be divided in three types:

  • Collection overseas, which falls under the responsibility of the Global Access Operations (GAO) division.
  • Domestic collection, which falls under the responsibility of the Special Source Operations (SSO) division.
  • Hacking operations, which falls under the responsibility of the Tailored Access Operations (TAO) division.

Collection overseas

Echelon

Main article: ECHELON

Echelon was created in the incubator of the Cold War.[193] Today it is a legacy system, and several NSA stations are closing.[175]

NSA/CSS, in combination with the equivalent agencies in the United Kingdom (Government Communications Headquarters), Canada (Communications Security Establishment), Australia (Defence Signals Directorate), and New Zealand (Government Communications Security Bureau), otherwise known as the UKUSA group,[194] was reported to be in command of the operation of the so-called ECHELON system. Its capabilities were suspected to include the ability to monitor a large proportion of the world’s transmitted civilian telephone, fax and data traffic.[195]

During the early 1970s, the first of what became more than eight large satellite communications dishes were installed at Menwith Hill.[196] Investigative journalist Duncan Campbell reported in 1988 on the ECHELON surveillance program, an extension of the UKUSA Agreement on global signals intelligence SIGINT, and detailed how the eavesdropping operations worked.[197] In November 3, 1999 the BBC reported that they had confirmation from the Australian Government of the existence of a powerful “global spying network” code-named Echelon, that could “eavesdrop on every single phone call, fax or e-mail, anywhere on the planet” with Britain and the United States as the chief protagonists. They confirmed that Menwith Hill was “linked directly to the headquarters of the US National Security Agency (NSA) at Fort Meade in Maryland”.[198]

NSA’s United States Signals Intelligence Directive 18 (USSID 18) strictly prohibited the interception or collection of information about “… U.S. persons, entities, corporations or organizations….” without explicit written legal permission from the United States Attorney General when the subject is located abroad, or the Foreign Intelligence Surveillance Court when within U.S. borders. Alleged Echelon-related activities, including its use for motives other than national security, including political and industrial espionage, received criticism from countries outside the UKUSA alliance.[199][200]

Protesters against NSA data mining in Berlin wearing Chelsea Manning and Edward Snowden masks.

Other SIGINT operations overseas

The NSA is also involved in planning to blackmail people with “SEXINT“, intelligence gained about a potential target’s sexual activity and preferences. Those targeted had not committed any apparent crime nor were charged with one.[201]

In order to support its facial recognition program, the NSA is intercepting “millions of images per day”.[202]

The Real Time Regional Gateway is a data collection program introduced in 2005 in Iraq by NSA during the Iraq War that consisted of gathering all electronic communication, storing it, then searching and otherwise analyzing it. It was effective in providing information about Iraqi insurgents who had eluded less comprehensive techniques.[203] This “collect it all” strategy introduced by NSA director, Keith B. Alexander, is believed by Glenn Greenwald of The Guardian to be the model for the comprehensive worldwide mass archiving of communications which NSA is engaged in as of 2013.[204]

BoundlessInformant

Edward Snowden revealed in June 2013 that between February 8 and March 8, 2013, the NSA collected about 124.8 billion telephone data items and 97.1 billion computer data items throughout the world, as was displayed in charts from an internal NSA tool codenamed Boundless Informant. It was reported that some of these data reflected eavesdropping on citizens in countries like Germany, Spain and France.[205]

BoundlessInformant employs big data databases, cloud computing technology, and Free and Open Source Software (FOSS) to analyze data collected worldwide by the NSA.[206]

Bypassing encryption

In 2013, reporters uncovered a secret memo that claims the NSA created and pushed for the adoption of the Dual_EC_DRBG encryption standard that contained built-in vulnerabilities in 2006 to the United States National Institute of Standards and Technology (NIST), and the International Organization for Standardization (aka ISO).[207][208] This memo appears to give credence to previous speculation by cryptographers at Microsoft Research.[209] Edward Snowden claims that the NSA often bypasses encryption altogether by lifting information before it is encrypted or after it is decrypted.[208]

XKeyscore rules (as specified in a file xkeyscorerules100.txt, sourced by German TV stations NDR and WDR, who claim to have excerpts from its source code) reveal that the NSA tracks users of privacy-enhancing software tools, including Tor; an anonymous email service provided by the MIT Computer Science and Artificial Intelligence Laboratory (CSAIL) in Cambridge, Massachusetts; and readers of the Linux Journal.[210][211]

Domestic activity

NSA’s mission, as set forth in Executive Order 12333 in 1981, is to collect information that constitutes “foreign intelligence or counterintelligence” while not “acquiring information concerning the domestic activities of United States persons”. NSA has declared that it relies on the FBI to collect information on foreign intelligence activities within the borders of the United States, while confining its own activities within the United States to the embassies and missions of foreign nations.[212] The appearance of a ‘Domestic Surveillance Directorate’ of the NSA was soon exposed as a hoax in 2013.[213][214]

NSA’s domestic surveillance activities are limited by the requirements imposed by the Fourth Amendment to the U.S. Constitution. The Foreign Intelligence Surveillance Court for example held in October 2011, citing multiple Supreme Court precedents, that the Fourth Amendment prohibitions against unreasonable searches and seizures applies to the contents of all communications, whatever the means, because “a person’s private communications are akin to personal papers.”[215] However, these protections do not apply to non-U.S. persons located outside of U.S. borders, so the NSA’s foreign surveillance efforts are subject to far fewer limitations under U.S. law.[216] The specific requirements for domestic surveillance operations are contained in the Foreign Intelligence Surveillance Act of 1978 (FISA), which does not extend protection to non-U.S. citizens located outside of U.S. territory.[216]

George W. Bush administration

George W. Bush, president during the 9/11 terrorist attacks, approved the Patriot Act shortly after the attacks to take anti-terrorist security measures. Title 1, 2, and 9 specifically authorized measures that would be taken by the NSA. These titles granted enhanced domestic security against terrorism, surveillance procedures, and improved intelligence, respectively. On March 10, 2004, there was a debate between President Bush and White House Counsel Alberto Gonzales, Attorney General John Ashcroft, and Acting Attorney General James Comey. The Attorney Generals were unsure if the NSA’s programs could be considered constitutional. They threatened to resign over the matter, but ultimately the NSA’s programs continued.[217] On March 11, 2004, President Bush signed a new authorization for mass surveillance of Internet records, in addition to the surveillance of phone records.This allowed the president to be able to override laws such as the Foreign Intelligence Surveillance Act, which protected civilians from mass surveillance. In addition to this, President Bush also signed that the measures of mass surveillance were also retroactively in place.[218]

Warrantless wiretaps

On December 16, 2005, The New York Times reported that, under White House pressure and with an executive order from President George W. Bush, the National Security Agency, in an attempt to thwart terrorism, had been tapping phone calls made to persons outside the country, without obtaining warrants from the United States Foreign Intelligence Surveillance Court, a secret court created for that purpose under the Foreign Intelligence Surveillance Act (FISA).[219]

One such surveillance program, authorized by the U.S. Signals Intelligence Directive 18 of President George Bush, was the Highlander Project undertaken for the National Security Agency by the U.S. Army 513th Military Intelligence Brigade. NSA relayed telephone (including cell phone) conversations obtained from ground, airborne, and satellite monitoring stations to various U.S. Army Signal Intelligence Officers, including the 201st Military Intelligence Battalion. Conversations of citizens of the U.S. were intercepted, along with those of other nations.[220]

Proponents of the surveillance program claim that the President has executive authority to order such action, arguing that laws such as FISA are overridden by the President’s Constitutional powers. In addition, some argued that FISA was implicitly overridden by a subsequent statute, the Authorization for Use of Military Force, although the Supreme Court’s ruling in Hamdan v. Rumsfeld deprecates this view. In the August 2006 case ACLU v. NSA, U.S. District Court Judge Anna Diggs Taylor concluded that NSA’s warrantless surveillance program was both illegal and unconstitutional. On July 6, 2007 the 6th Circuit Court of Appeals vacated the decision on the grounds that the ACLU lacked standing to bring the suit.[221]

On January 17, 2006, the Center for Constitutional Rights filed a lawsuit, CCR v. Bush, against the George W. Bush Presidency. The lawsuit challenged the National Security Agency’s (NSA’s) surveillance of people within the U.S., including the interception of CCR emails without securing a warrant first.[222][223]

In September 2008, the Electronic Frontier Foundation (EFF) filed a class action lawsuit against the NSA and several high-ranking officials of the Bush administration,[224] charging an “illegal and unconstitutional program of dragnet communications surveillance,”[225] based on documentation provided by former AT&T technician Mark Klein.[226]

As a result of the USA Freedom Act passed by Congress in June 2015, the NSA had to shut down its bulk phone surveillance program on November 29 of the same year. The USA Freedom Act forbids the NSA to collect metadata and content of phone calls unless it has a warrant for terrorism investigation. In that case the agency has to ask the telecom companies for the record, which will only be kept for six months.

AT&T Internet monitoring

In May 2006, Mark Klein, a former AT&T employee, alleged that his company had cooperated with NSA in installing Narus hardware to replace the FBI Carnivore program, to monitor network communications including traffic between American citizens.[227]

Data mining

NSA was reported in 2008 to use its computing capability to analyze “transactional” data that it regularly acquires from other government agencies, which gather it under their own jurisdictional authorities. As part of this effort, NSA now monitors huge volumes of records of domestic email data, web addresses from Internet searches, bank transfers, credit-card transactions, travel records, and telephone data, according to current and former intelligence officials interviewed by The Wall Street Journal. The sender, recipient, and subject line of emails can be included, but the content of the messages or of phone calls are not.[228]

A 2013 advisory group for the Obama administration, seeking to reform NSA spying programs following the revelations of documents released by Edward J. Snowden.[229] mentioned in ‘Recommendation 30’ on page 37, “…that the National Security Council staff should manage an interagency process to review on a regular basis the activities of the US Government regarding attacks that exploit a previously unknown vulnerability in a computer application.” Retired cyber security expert Richard A. Clarke was a group member and stated on April 11 that NSA had no advance knowledge of Heartbleed.[230]

Illegally obtained evidence

In August 2013 it was revealed that a 2005 IRS training document showed that NSA intelligence intercepts and wiretaps, both foreign and domestic, were being supplied to the Drug Enforcement Administration (DEA) and Internal Revenue Service (IRS) and were illegally used to launch criminal investigations of US citizens. Law enforcement agents were directed to conceal how the investigations began and recreate an apparently legal investigative trail by re-obtaining the same evidence by other means.[231][232]

Barack Obama administration

In the months leading to April 2009, the NSA intercepted the communications of American citizens, including a Congressman, although the Justice Department believed that the interception was unintentional. The Justice Department then took action to correct the issues and bring the program into compliance with existing laws.[233] United States Attorney General Eric Holder resumed the program according to his understanding of the Foreign Intelligence Surveillance Act amendment of 2008, without explaining what had occurred.[234]

Polls conducted in June 2013 found divided results among Americans regarding NSA’s secret data collection.[235] Rasmussen Reports found that 59% of Americans disapprove,[236] Gallup found that 53% disapprove,[237] and Pew found that 56% are in favor of NSA data collection.[238]

Section 215 metadata collection

On April 25, 2013, the NSA obtained a court order requiring Verizon‘s Business Network Services to provide metadata on all calls in its system to the NSA “on an ongoing daily basis” for a three-month period, as reported by The Guardian on June 6, 2013. This information includes “the numbers of both parties on a call … location data, call duration, unique identifiers, and the time and duration of all calls” but not “[t]he contents of the conversation itself”. The order relies on the so-called “business records” provision of the Patriot Act.[239][240]

In August 2013, following the Snowden leaks, new details about the NSA’s data mining activity were revealed. Reportedly, the majority of emails into or out of the United States are captured at “selected communications links” and automatically analyzed for keywords or other “selectors”. Emails that do not match are deleted.[241]

The utility of such a massive metadata collection in preventing terrorist attacks is disputed. Many studies reveal the dragnet like system to be ineffective. One such report, released by the New America Foundation concluded that after an analysis of 225 terrorism cases, the NSA “had no discernible impact on preventing acts of terrorism.”[242]

Defenders of the program say that while metadata alone can’t provide all the information necessary to prevent an attack, it assures the ability to “connect the dots”[243] between suspect foreign numbers and domestic numbers with a speed only the NSA’s software is capable of. One benefit of this is quickly being able to determine the difference between suspicious activity and real threats.[citation needed] As an example, NSA director General Keith Alexander mentioned at the annual Cybersecurity Summit in 2013, that metadata analysis of domestic phone call records after the Boston Marathon bombing helped determine that[clarification needed] another attack in New York was baseless.[243]

In addition to doubts about its effectiveness, many people argue that the collection of metadata is an unconstitutional invasion of privacy. As of 2015, the collection process remains legal and grounded in the ruling from Smith v. Maryland (1979). A prominent opponent of the data collection and its legality is U.S. District Judge Richard J. Leon, who issued a report in 2013[244] in which he stated: “I cannot imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systematic and high tech collection and retention of personal data on virtually every single citizen for purposes of querying and analyzing it without prior judicial approval…Surely, such a program infringes on ‘that degree of privacy’ that the founders enshrined in the Fourth Amendment”.

The PRISM program[edit]

PRISM: a clandestine surveillance program under which the NSA collects user data from companies like Microsoft and Facebook.

Under the PRISM program, which started in 2007,[245][246] NSA gathers Internet communications from foreign targets from nine major U.S. Internet-based communication service providers: Microsoft,[247] Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube and Apple. Data gathered include email, video and voice chat, videos, photos, VoIP chats such as Skype, and file transfers.

June 2015 – WikiLeaks: Industrial espionage

In June 2015, Wikileaks published documents, which showed that NSA spied on French companies.[248]

July 2015 – WikiLeaks: Espionage against German federal ministries[edit]

In July 2015, WikiLeaks published documents, which showed that NSA spied on federal German ministries since 1990s.[249][250] Even Germany’s Chancellor Angela Merkel‘s cellphones and phone of her predecessors had been intercepted.[251]

Claims of prevented terrorist attacks

Former NSA director General Keith Alexander claimed that in September 2009 the NSA prevented Najibullah Zazi and his friends from carrying out a terrorist attack.[252] However, this claim has been debunked and no evidence has been presented demonstrating that the NSA has ever been instrumental in preventing a terrorist attack.[253][254][255][256]

Hacking operations

Besides the more traditional ways of eavesdropping in order to collect signals intelligence, NSA is also engaged in hacking computers, smartphones and their networks. These operations are conducted by the Tailored Access Operations (TAO) division.

NSA’s China hacking group

According to the Foreign Policy magazine, “… the Office of Tailored Access Operations, or TAO, has successfully penetrated Chinese computer and telecommunications systems for almost 15 years, generating some of the best and most reliable intelligence information about what is going on inside the People’s Republic of China.”[257][258]

Syrian internet blackout

In an interview with Wired magazine, Edward Snowden said the Tailored Access Operations division accidentally caused Syria‘s internet blackout in 2012.[259]

Suspected responsibility for hacking operations by the Equation Group[edit]

The espionage group named the Equation Group, described by discoverers Kaspersky Labs as one of the most advanced (if not the most advanced) in the world as of 2015,[260]:31 and connected to over 500 malware infections in at least 42 countries over many years, is suspected of being a part of NSA.[261][262] The group’s known espionage methods have been documented to include interdiction (interception of legitimate CDs sent by a scientific conference organizer by mail),[260]:15 and the “unprecedented” ability to infect and be transmitted through the hard drive firmware of several of the major hard drive manufacturers, and create and use hidden disk areas and virtual disk systems for its purposes, a feat demanding access to the manufacturer’s source code of each to achieve.[260]:16–18 The methods used to deploy the tools demonstrated “surgical precision”, going so far as to exclude specific countries by IP and allow targeting of specific usernames on discussion forums.[260]:23–26 The techniques and knowledge used by the Equation Group are considered in summary to be “out of the reach of most advanced threat groups in the world except [this group].[260]:31

Software backdoors

Linux kerne

Linus Torvalds, the founder of Linux kernel, joked during a LinuxCon keynote on September 18, 2013 that the NSA, who are the founder of SELinux, wanted a backdoor in the kernel.[263]However, later, Linus’ father, a Member of the European Parliament (MEP), revealed that the NSA actually did this.[264]

When my oldest son [Linus Torvalds] was asked the same question: “Has he been approached by the NSA about backdoors?” he said “No”, but at the same time he nodded. Then he was sort of in the legal free. He had given the right answer, [but] everybody understood that the NSA had approached him.

— Nils Torvalds, LIBE Committee Inquiry on Electronic Mass Surveillance of EU Citizens – 11th Hearing, 11 November 2013[265]
Microsoft Windows
Main article: _NSAKEY

_NSAKEY was a variable name discovered in Microsoft‘s Windows NT 4 Service Pack 5 (which had been released unstripped of its symbolic debugging data) in August 1999 by Andrew D. Fernandes of Cryptonym Corporation. That variable contained a 1024-bit public key.

IBM Notes

IBM Notes was the first widely adopted software product to use public key cryptography for client–server and server–server authentication and for encryption of data. Until US laws regulating encryption were changed in 2000, IBM and Lotus were prohibited from exporting versions of Notes that supported symmetric encryption keys that were longer than 40 bits. In 1997, Lotus negotiated an agreement with the NSA that allowed export of a version that supported stronger keys with 64 bits, but 24 of the bits were encrypted with a special key and included in the message to provide a “workload reduction factor” for the NSA. This strengthened the protection for users of Notes outside the US against private-sector industrial espionage, but not against spying by the US government.[266][267]

Boomerang routing

While it is assumed that foreign transmissions terminating in the U.S. (such as a non-U.S. citizen accessing a U.S. website) subject non-U.S. citizens to NSA surveillance, recent research into boomerang routing has raised new concerns about the NSA’s ability to surveil the domestic Internet traffic of foreign countries.[18] Boomerang routing occurs when an Internet transmission that originates and terminates in a single country transits another. Research at the University of Toronto has suggested that approximately 25% of Canadian domestic traffic may be subject to NSA surveillance activities as a result of the boomerang routing of Canadian Internet service providers.[18]

Hardware implanting

Intercepted packages are opened carefully by NSA employees
A “load station” implanting a beacon

A document included in NSA files released with Glenn Greenwald‘s book No Place to Hide details how the agency’s Tailored Access Operations (TAO) and other NSA units gain access to hardware. They intercept routers, servers and other network hardware being shipped to organizations targeted for surveillance and install covert implant firmware onto them before they are delivered. This was described by an NSA manager as “some of the most productive operations in TAO because they preposition access points into hard target networks around the world.”[268]

Computers seized by the NSA due to interdiction are often modified with a physical device known as Cottonmouth.[269]Cottonmouth is a device that can be inserted in the USB port of a computer in order to establish remote access to the targeted machine. According to NSA’s Tailored Access Operations (TAO) group implant catalog, after implanting Cottonmouth, the NSA can establish Bridging (networking) “that allows the NSA to load exploit software onto modified computers as well as allowing the NSA to relay commands and data between hardware and software implants.”[270]

Role in scientific research and development[

NSA has been involved in debates about public policy, both indirectly as a behind-the-scenes adviser to other departments, and directly during and after Vice Admiral Bobby Ray Inman‘s directorship. NSA was a major player in the debates of the 1990s regarding the export of cryptography in the United States. Restrictions on export were reduced but not eliminated in 1996.

Its secure government communications work has involved the NSA in numerous technology areas, including the design of specialized communications hardware and software, production of dedicated semiconductors (at the Ft. Meade chip fabrication plant), and advanced cryptography research. For 50 years, NSA designed and built most of its computer equipment in-house, but from the 1990s until about 2003 (when the U.S. Congress curtailed the practice), the agency contracted with the private sector in the fields of research and equipment.[271]

Data Encryption Standard

FROSTBURG was the NSA’s first supercomputer, used from 1991 to 1997

NSA was embroiled in some minor controversy concerning its involvement in the creation of the Data Encryption Standard (DES), a standard and public block cipher algorithm used by the U.S. government and banking community. During the development of DES by IBM in the 1970s, NSA recommended changes to some details of the design. There was suspicion that these changes had weakened the algorithm sufficiently to enable the agency to eavesdrop if required, including speculation that a critical component—the so-called S-boxes—had been altered to insert a “backdoor” and that the reduction in key length might have made it feasible for NSA to discover DES keys using massive computing power. It has since been observed that the S-boxes in DES are particularly resilient against differential cryptanalysis, a technique which was not publicly discovered until the late 1980s, but which was known to the IBM DES team.

The United States Senate Select Committee on Intelligence reviewed NSA’s involvement, and concluded that while the agency had provided some assistance, it had not tampered with the design.[272][273] In late 2009 NSA declassified information stating that “NSA worked closely with IBM to strengthen the algorithm against all except brute force attacks and to strengthen substitution tables, called S-boxes. Conversely, NSA tried to convince IBM to reduce the length of the key from 64 to 48 bits. Ultimately they compromised on a 56-bit key.”[274][275]

Advanced Encryption Standard

The involvement of NSA in the selection of a successor to Data Encryption Standard (DES), the Advanced Encryption Standard (AES), was limited to hardware performance testing (see AES competition).[276] NSA has subsequently certified AES for protection of classified information (for at most two levels, e.g. SECRET information in an unclassified environment[clarification needed]) when used in NSA-approved systems.[277]

NSA encryption systems

STU-III secure telephones on display at the National Cryptologic Museum

The NSA is responsible for the encryption-related components in these legacy systems:

  • FNBDT Future Narrow Band Digital Terminal[278]
  • KL-7 ADONIS off-line rotor encryption machine (post-WWII – 1980s)[279][280]
  • KW-26 ROMULUS electronic in-line teletypewriter encryptor (1960s–1980s)[281]
  • KW-37 JASON fleet broadcast encryptor (1960s–1990s)[280]
  • KY-57 VINSON tactical radio voice encryptor[281]
  • KG-84 Dedicated Data Encryption/Decryption[281]
  • STU-III secure telephone unit,[281] phased out by the STE[282]

The NSA oversees encryption in following systems which are in use today:

The NSA has specified Suite A and Suite B cryptographic algorithm suites to be used in U.S. government systems; the Suite B algorithms are a subset of those previously specified by NIST and are expected to serve for most information protection purposes, while the Suite A algorithms are secret and are intended for especially high levels of protection.[277]

SHA

The widely used SHA-1 and SHA-2 hash functions were designed by NSA. SHA-1 is a slight modification of the weaker SHA-0 algorithm, also designed by NSA in 1993. This small modification was suggested by NSA two years later, with no justification other than the fact that it provides additional security. An attack for SHA-0 that does not apply to the revised algorithm was indeed found between 1998 and 2005 by academic cryptographers. Because of weaknesses and key length restrictions in SHA-1, NIST deprecates its use for digital signatures, and approves only the newer SHA-2 algorithms for such applications from 2013 on.[287]

A new hash standard, SHA-3, has recently been selected through the competition concluded October 2, 2012 with the selection of Keccak as the algorithm. The process to select SHA-3 was similar to the one held in choosing the AES, but some doubts have been cast over it,[288][289] since fundamental modifications have been made to Keccak in order to turn it into a standard.[290] These changes potentially undermine the cryptanalysis performed during the competition and reduce the security levels of the algorithm.[288]

Dual_EC_DRBG random number generator

Main article: Dual_EC_DRBG

NSA promoted the inclusion of a random number generator called Dual_EC_DRBG in the U.S. National Institute of Standards and Technology‘s 2007 guidelines. This led to speculation of a backdoor which would allow NSA access to data encrypted by systems using that pseudo random number generator.[291]

This is now deemed to be plausible based on the fact that the output of the next iterations of the PRNG can provably be determined if the relation between two internal elliptic curve points is known.[292][293] Both NIST and RSA are now officially recommending against the use of this PRNG.[294][295]

Clipper chip

Main article: Clipper chip

Because of concerns that widespread use of strong cryptography would hamper government use of wiretaps, NSA proposed the concept of key escrow in 1993 and introduced the Clipper chip that would offer stronger protection than DES but would allow access to encrypted data by authorized law enforcement officials.[296] The proposal was strongly opposed and key escrow requirements ultimately went nowhere.[297] However, NSA’s Fortezza hardware-based encryption cards, created for the Clipper project, are still used within government, and NSA ultimately declassified and published the design of the Skipjack cipher used on the cards.[298][299]

Perfect Citizen

Main article: Perfect Citizen

Perfect Citizen is a program to perform vulnerability assessment by the NSA on U.S. critical infrastructure.[300][301] It was originally reported to be a program to develop a system of sensors to detect cyber attacks on critical infrastructure computer networks in both the private and public sector through a network monitoring system named Einstein.[302][303] It is funded by the Comprehensive National Cybersecurity Initiative and thus far Raytheon has received a contract for up to $100 million for the initial stage.

Academic research

NSA has invested many millions of dollars in academic research under grant code prefix MDA904, resulting in over 3,000 papers (as of 2007-10-11). NSA/CSS has, at times, attempted to restrict the publication of academic research into cryptography; for example, the Khufu and Khafre block ciphers were voluntarily withheld in response to an NSA request to do so. In response to a FOIA lawsuit, in 2013 the NSA released the 643-page research paper titled, “Untangling the Web: A Guide to Internet Research,[304] ” written and compiled by NSA employees to assist other NSA workers in searching for information of interest to the agency on the public Internet.[305]

Patents

NSA has the ability to file for a patent from the U.S. Patent and Trademark Office under gag order. Unlike normal patents, these are not revealed to the public and do not expire. However, if the Patent Office receives an application for an identical patent from a third party, they will reveal NSA’s patent and officially grant it to NSA for the full term on that date.[306]

One of NSA’s published patents describes a method of geographically locating an individual computer site in an Internet-like network, based on the latency of multiple network connections.[307] Although no public patent exists, NSA is reported to have used a similar locating technology called trilateralization that allows real-time tracking of an individual’s location, including altitude from ground level, using data obtained from cellphone towers.[308]

Legality

File:Ron Wyden and James Clapper - 12 March 2013.webm

Excerpt of James Clapper‘s false testimony to Congress on NSA surveillance programs

In the United States, at least since 2001,[309] there has been legal controversy over what signal intelligence can be used for and how much freedom the National Security Agency has to use signal intelligence.[310] The government has made, in 2015, slight changes in how it uses and collects certain types of data,[311] specifically phone records. President Barack Obama has asked lawyers and his national security team to look at the tactics that are being used by the NSA. President Obama made a speech on January 17, 2014 where he defended the national security measures, including the NSA, and their intentions for keeping the country safe through surveillance. He said that it is difficult to determine where the line should be drawn between what is too much surveillance and how much is needed for national security because technology is ever changing and evolving. Therefore, the laws cannot keep up with the rapid advancements.

President Obama did make some changes to national security regulations and how much data can be collected and surveyed.[citation needed] The first thing he added, was more presidential directive and oversight so that privacy and basic rights are not violated. The president would look over requests on behalf of American citizens to make sure that their personal privacy is not violated by the data that is being requested. Secondly, surveillance tactics and procedures are becoming more public, including over 40 rulings of the FISC that have been declassified.[citation needed] Thirdly, further protections are being placed on activities that are justified under Section 702, such as the ability to retain, search and use data collected in investigations, which allows the NSA to monitor and intercept interaction of targets overseas. Finally, national security letters, which are secret requests for information that the FBI uses in their investigations, are becoming less secretive. The secrecy of the information requested will not be indefinite and will terminate after a set time if future secrecy is not required.[citation needed] Concerning the bulk surveillance of American’s phone records, President Obama also ordered a transition from bulk surveillance under Section 215 to a new policy that will eliminate unnecessary bulk collection of metadata.

As of May 7, 2015, the U.S. Court of Appeals for the Second Circuit ruled that the interpretation of Section 215 of the Patriot Act was wrong and that the NSA program that has been collecting Americans’ phone records in bulk is illegal.[312] It stated that Section 215 cannot be clearly interpreted to allow government to collect national phone data and, as a result, expired on June 1, 2015. This ruling “is the first time a higher-level court in the regular judicial system has reviewed the N.S.A. phone records program.” [313] The new bill getting passed later in May taking its place is known as the U.S.A. Freedom Act, which will enable the NSA to continue hunting for terrorists by analyzing telephone links between callers but “keep the bulk phone records in the hands of phone companies.”[313] This would give phone companies the freedom to dispose the records in an 18-month period. The White House argued that this new ruling validated President Obama’s support of the government being extracted from bulk data collection and giving power to the telecommunications companies.

Previously, the NSA paid billions of dollars to telecommunications companies in order to collect data from them.[314] While companies such as Google and Yahoo! claim that they do not provide “direct access” from their servers to the NSA unless under a court order,[315] the NSA had access to emails, phone calls and cellular data users.[316] With this new ruling, telecommunications companies would not provide the NSA with bulk information. The companies would allow the disposal of data in every 18 months,[313] which is arguably putting the telecommunications companies at a higher advantage.

This ruling made the collecting of phone records illegal, but it did not rule on Section 215’s constitutionality. Senate Majority Leader Mitch McConnell has already put forth a new bill to re-authorize the Patriot Act.[317] Defenders of this surveillance program are claiming that judges who sit on the Foreign Intelligence Surveillance Court (FISC) had ruled 37 times that this kind of collection of data is, in fact, lawful.[317] The FISC is the court specifically mandated to grant surveillance orders in the name of foreign intelligence. The new ruling made by the Second District Court of Appeals now retroactively dismisses the findings of the FISC on this program.

See also

Notes

https://en.wikipedia.org/wiki/National_Security_Agency

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Three Years Behind The Curve Too Late Federal Open Market Committee (FOMC) Increases Target Federal Funds Rate to .75-1.0% — Financial Repression of Savers Slowly Continues — Videos

Posted on March 15, 2017. Filed under: American History, Articles, Banking, Blogroll, Books, Business, College, Communications, Congress, conservatives, Constitution, Corruption, Crisis, Documentary, Economics, Education, Employment, Faith, Family, Federal Government, Federal Government Budget, Fiscal Policy, Food, Foreign Policy, Freedom, government, government spending, history, History of Economic Thought, Language, liberty, Life, Links, Literacy, Macroeconomics, media, Monetary Policy, Money, Movies, Non-Fiction, People, Philosophy, Photos, Police, Politics, Radio, Rants, Raves, Raymond Thomas Pronk, Sociology, Speech, Strategy, Television, Trade Policiy, Tutorials, Video, Water, Wealth, Welfare, Wisdom, Work, Writing | Tags: , , , , , , , , , , , , , , , , , , , , , , , , |

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Yellen Calms Fears Fed’s Policy Trigger Finger Is Getting Itchy

March 15, 2017, 1:00 PM CDT March 15, 2017, 5:02 PM CDT
  • Policy makers still project three total rate hikes for 2017
  • FOMC sticks with ‘gradual’ plan for removing accommodation

Fed Raises Benchmark Lending Rate a Quarter Point

Federal Reserve Chair Janet Yellen sought to reassure investors that the central bank’s latest interest-rate increase wasn’t a paradigm shift to a trigger-happy policy driven by fears of faster inflation.

Speaking to reporters after the Fed’s quarter percentage-point move on Wednesday, Yellen said the central bank was willing to tolerate inflation temporarily overshootingits 2 percent goal and that it intended to keep its policy accommodative for “some time.”

“The simple message is the economy’s doing well. We have confidence in the robustness of the economy and its resilience to shocks,” she said.

As a result, the Fed is sticking with its policy of gradually raising interest rates, Yellen said. In their first forecasts in three months, Fed policy makers penciled in two more quarter-point rate increases this year and three in 2018, unchanged from their projections in December.

Today’s decision “does not represent a reassessment of the economic outlook or of the appropriate course for monetary policy,” the Fed chief said.

Speculation of a more aggressive Fed had mounted in recent days after a host of central bank officials, including Yellen herself, went out of their way to telegraph to financial markets that a rate hike was imminent. The expectations were further fueled by news of rising inflation.

Stocks Advance

Stocks rose and bond yields fell as investors viewed the statement from the Federal Open Market Committee and Yellen’s remarks afterward as a sign that the Fed isn’t in a hurry to remove monetary stimulus. The FOMC raised the target range for the federal funds rate to 0.75 percent to 1 percent, as expected, but Yellen’s lack of urgency to snuff out inflation was a surprise.

R.J. Gallo, a fixed-income investment manager at Federated Investors in Pittsburgh, said the chorus of Fed speakers before this meeting led investors to expect a move up in the number of projected rate hikes this year, and even upgrades by Fed officials in the levels of inflation and growth they anticipated.

None of that materialized.

“You didn’t get any of those things,” Gallo said, which explains why Treasury yields quickly dropped after the Fed released the FOMC statement and a new set of economic projections. “The expectation that Fed was getting more hawkish had to come out of the market.”

The U.S. economy has mostly met the central bank’s goals of full employment and stable prices, and may get further support if President Donald Trump delivers promised fiscal stimulus. Investor and business confidence has soared since Trump won the presidency in November, buoyed by his vows to cut taxes, lift infrastructure spending and ease regulations.

Still, the data don’t show an economy that’s heating up rapidly — a point Yellen herself made after the third rate hike since the 2007-2009 recession ended. In fact, the economy may have “more room to run,” she said.

Stronger business and consumer confidence hasn’t yet translated into increased investment and spending, said Yellen.

“It’s uncertain just how much sentiment actually impacts spending decisions, and I wouldn’t say at this point that I have seen hard evidence of any change in spending decisions,” said the Fed Chair. “Most of the business people that we’ve talked to also have a wait-and-see attitude.”

Retail sales in February grew at the slowest pace since August, a government report showed earlier Wednesday. The Atlanta Fed’s model for GDP predicts an expansion of 0.9 percent in the first quarter, less than a third the pace Trump is aiming for.

Fiscal Stimulus

Asked about the potential for a fiscal boost, Yellen made clear the Fed is still waiting for more concrete policy plans to emerge from the Trump administration before adapting monetary policy in reaction.

“There is great uncertainty about the timing, the size and the character of policy changes that may be put in place,” Yellen said. “I don’t think that’s a decision or set of decisions that we need to make until we know more about what policy changes will go into effect.”

Yellen disputed suggestions that the Fed was on a collision course with the Trump administration over its plans to foster faster economic growth through tax cuts and deregulation. “We would welcome stronger economic growth in the context of price stability,” she said.

She said she had met Trump briefly and had gotten together a couple of times with Treasury Secretary Steven Mnuchin to discuss the economy and financial regulation.

Further underscoring their lack of urgency, Fed officials repeated a commitment to maintain their balance-sheet reinvestment policy until rate increases were well under way. Yellen said officials had discussed the process of reducing the balance sheet gradually, but had made no decisions and would continue to debate the topic.

Policy makers forecast inflation will reach 1.9 percent in the fourth quarter this year, and 2 percent in both 2018 and 2019, according to quarterly median estimates released with the FOMC statement. The Fed’s preferred measure of inflation rose 1.9 percent in the 12 months through January, just shy of its target.

Yellen pointed out, though, that core inflation continues to run somewhat further below 2 percent. That rate, which strips out food and energy costs, stood at 1.7 percent in January. The Fed’s new forecast for the core rate at the end of this year edged up to 1.9 percent, from 1.8 percent in December.

“The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,” the Fed said. Discussing the word symmetric in the statement, Yellen said during her press conference that the Fed was not shooting to push inflation over 2 percent but recognized that it could temporarily go above it. Two percent is a target, she reiterated, not a ceiling.

https://www.bloomberg.com/news/articles/2017-03-15/fed-raises-benchmark-rate-as-inflation-approaches-2-target

Changes in the federal funds rate will always affect the U.S. dollar. When the Federal Reserve increases the federal funds rate, it normally reduces inflationary pressure and works to appreciate the dollar.

Since June 2006, however, the Fed has maintained a federal funds rate of close to 0%. In the wake of the 2008 financial crisis, the federal funds rate fluctuated between 0-0.25%, and is now 0.75%.

The Fed used this monetary policy to help achieve maximum employment and stable prices. Now that the 2008 financial crisis has largely subsided, the Fed will look to increase interest rates to continue to achieve employment and to stabilize prices.

Inflation of the U.S. Dollar

The best way to achieve full employment and stable prices is to set the inflation rate of the dollar at 2%. In 2011, the Fed officially adopted a 2% annual increase in the price index for personal consumption expenditures as its target. When the economy is weak, inflation naturally falls; when the economy is strong, rising wages increase inflation. Keeping inflation at a growth rate of 2% helps the economy grow at a healthy rate.

Adjustments to the federal funds rate can also affect inflation in the United States. The Fed controls the economy by increasing interest rates when the economy is growing too fast. This encourages people to save more and spend less, reducing inflationary pressure. Conversely, when the economy is in a recession or growing too slowly, the Fed reduces interest rates to stimulate spending, which increases inflation.

During the 2008 financial crisis, the low federal funds rate should have increased inflation. Over this period, the federal funds rate was set near 0%, which encouraged spending and would normally increase inflation.

However, inflation is still well below the 2% target, which is contrary to the normal effects of low interest rates. The Fed cites one-off factors, such as falling oil prices and the strengthening dollar, as the reasons why inflation has remained low in a low interest environment.

The Fed believes that these factors will eventually fade and that inflation will increase above the target 2%. To prevent this eventual increase in inflation, hiking the federal funds rate reduces inflationary pressure and cause inflation of the dollar to remain around 2%.

Appreciation of the U.S. Dollar

Increases in the federal funds rate also result in a strengthening of the U.S. dollar. Other ways that the dollar can appreciate include increases in average wages and increases in overall consumption. However, although jobs are being created, wage rates are stagnant.

Without an increase in wage rates to go along with a strengthening job market, consumption won’t increase enough to sustain economic growth. Additionally, consumption remains subdued due to the fact that the labor force participation rate was close to its 35-year low in 2015. The Fed has kept interest rates low because a lower federal funds rate supports business expansions, which leads to more jobs and higher consumption. This has all worked to keep appreciation of the U.S. dollar low.

However, the U.S. is ahead of the other developed markets in terms of its economic recovery. Although the Fed raises rates cautiously, the U.S. could see higher interest rates before the other developed economies.

Overall, under normal economic conditions, increases in the federal funds rate reduce inflation and increase the appreciation of the U.S. dollar.

http://www.investopedia.com/articles/investing/101215/how-fed-fund-rate-hikes-affect-us-dollar.asp

Financial repression

From Wikipedia, the free encyclopedia
Not to be confused with economic repression, a type of political repression.

Financial repression refers to “policies that result in savers earning returns below the rate of inflation” in order to allow banks to “provide cheap loans to companies and governments, reducing the burden of repayments”.[1] It can be particularly effective at liquidating government debt denominated in domestic currency.[2] It can also lead to a large expansions in debt “to levels evoking comparisons with the excesses that generated Japan’s lost decade and the Asian financial crisis” in 1997.[1]

The term was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon[3][4] in order to “disparage growth-inhibiting policies in emerging markets“.

Mechanism

Financial repression consists of the following:[5]

  1. Explicit or indirect capping of interest rates, such as on government debt and deposit rates (e.g., Regulation Q).
  2. Government ownership or control of domestic banks and financial institutions with barriers that limit other institutions from entering the market.
  3. High reserve requirements.
  4. Creation or maintenance of a captive domestic market for government debt, achieved by requiring banks to hold government debt via capital requirements, or by prohibiting or disincentivising alternatives.
  5. Government restrictions on the transfer of assets abroad through the imposition of capital controls.

These measures allow governments to issue debt at lower interest rates. A low nominal interest rate can reduce debt servicing costs, while negative real interest rates erodes the real value of government debt.[5] Thus, financial repression is most successful in liquidating debts when accompanied by inflation and can be considered a form of taxation,[6] or alternatively a form of debasement.[7]

The size of the financial repression tax for 24 emerging markets from 1974 to 1987. Their results showed that financial repression exceeded 2% of GDP for seven countries, and greater than 3% for five countries. For five countries (India, Mexico, Pakistan, Sri Lanka, and Zimbabwe) it represented approximately 20% of tax revenue. In the case of Mexico financial repression was 6% of GDP, or 40% of tax revenue.[8]

Financial repression is categorized as “macroprudential regulation“—i.e., government efforts to “ensure the health of an entire financial system.[2]

Examples

After World War II

Financial repression “played an important role in reducing debt-to-GDP ratios after World War II” by keeping real interest rates for government debt below 1% for two-thirds of the time between 1945 and 1980, the United States was able to “inflate away” the large debt (122% of GDP) left over from the Great Depression and World War II.[2] In the UK, government debt declined from 216% of GDP in 1945 to 138% ten years later in 1955.[9]

China

China‘s economic growth has been attributed to financial repression thanks to “low returns on savings and the cheap loans that it makes possible”. This has allowed China to rely on savings-financed investments for economic growth. However, because low returns also dampens consumer spending, household expenditures account for “a smaller share of GDP in China than in any other major economy”.[1] However, as of December 2014, the People’s Bank of China “started to undo decades of financial repression” and the government now allows Chinese savers to collect up to a 3.3% return on one-year deposits. At China’s 1.6% inflation rate, this is a “high real-interest rate compared to other major economies”.[1]

After the 2008 economic recession

In a 2011 NBER working paper, Carmen Reinhart and Maria Belen Sbrancia speculate on a possible return by governments to this form of debt reduction in order to deal with high debt levels following the 2008 economic crisis.[5]

“To get access to capital, Austria has restricted capital flows to foreign subsidiaries in central and eastern Europe. Select pension funds have also been transferred to governments in France, Portugal, Ireland and Hungary, enabling them to re-allocate toward sovereign bonds.”[10]

Criticism

Critics[who?] argue that if this view was true, investors (i.e., capital-seeking parties) would be inclined to demand capital in large quantities and would be buying capital goods from this capital. This high demand for capital goods would certainly lead to inflation and thus the central banks would be forced to raise interest rates again. As a boom pepped by low interest rates fails to appear these days in industrialized countries, this is a sign that the low interest rates seem to be necessary to ensure an equilibrium on the capital market, thus to balance capital-supply—i.e., savers—on one side and capital-demand—i.e., investors and the government—on the other. This view argues that interest rates would be even lower if it were not for the high government debt ratio (i.e., capital demand from the government).

Free-market economists argue that financial repression crowds out private-sector investment, thus undermining growth. On the other hand, “postwar politicians clearly decided this was a price worth paying to cut debt and avoid outright default or draconian spending cuts. And the longer the gridlock over fiscal reform rumbles on, the greater the chance that ‘repression’ comes to be seen as the least of all evils”.[11]

Also, financial repression has been called a “stealth tax” that “rewards debtors and punishes savers—especially retirees” because their investments will no longer generate the expected return, which is income for retirees.[10][12] “One of the main goals of financial repression is to keep nominal interest rates lower than they would be in more competitive markets. Other things equal, this reduces the government’s interest expenses for a given stock of debt and contributes to deficit reduction. However, when financial repression produces negative real interest rates (nominal rates below the inflation rate), it reduces or liquidates existing debts and becomes the equivalent of a tax—a transfer from creditors (savers) to borrowers, including the government.”[2]

See also

Reform:

General:

References

  1. ^ Jump up to:a b c d “China Savers Prioritized Over Banks by PBOC”. Bloomberg. November 25, 2014.
  2. ^ Jump up to:a b c d Carmen M. Reinhart, Jacob F. Kirkegaard, and M. Belen Sbrancia, “Financial Repression Redux”, IMF Finance and Development, June 2011, p. 22-26
  3. Jump up^ Shaw, Edward S. Financial Deepening in Economic Development. New York: Oxford University Press, 1973
  4. Jump up^ McKinnon, Ronald I. Money and Capital in Economic Development. Washington, D.C.: Brookings Institution, 1973
  5. ^ Jump up to:a b c Carmen M. Reinhart and M. Belen Sbrancia, “The Liquidation of Government Debt”, IMF, 2011, p. 19
  6. Jump up^ Reinhart, Carmen M. and Rogoff, Kenneth S., This Time is Different: Eight Centuries of Financial Folly. Princeton and Oxford: Princeton University Press, 2008, p. 143
  7. Jump up^ Bill Gross, “The Caine Mutiny Part 2”, PIMCO
  8. Jump up^ Giovannini, Alberto and de Melo, Martha, “Government Revenue from Financial Repression”, The American Economic Review, Vol. 83, No. 4 Sep. 1993 (pp. 953-963)
  9. Jump up^ “The great repression”. The Economist. 16 June 2011.
  10. ^ Jump up to:a b “Financial Repression 101”. Allianz Global Investors. Retrieved 2 December 2014.
  11. Jump up^ Gillian Tett, “Policymakers learn a new and alarming catchphrase”, Financial Times, May 9, 2011
  12. Jump up^ Amerman, Daniel (September 12, 2011). “The 2nd Edge of Modern Financial Repression: Manipulating Inflation Indexes to Steal from Retirees & Public Wor

https://en.wikipedia.org/wiki/Financial_repression

Federal funds rate

From Wikipedia, the free encyclopedia

10 year treasury compared to the Federal Funds Rate

Federal funds rate and capacity utilization in manufacturing.

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions’ reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.[1][2]

The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The federal funds target rate is determined by a meeting of the members of the Federal Open Market Committee which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule.

The Federal Reserve uses open market operations to influence the supply of money in the U.S. economy[3] to make the federal funds effective rate follow the federal funds target rate.

Mechanism

Financial Institutions are obligated by law to maintain certain levels of reserves, either as reserves with the Fed or as vault cash. The level of these reserves is determined by the outstanding assets and liabilities of each depository institution, as well as by the Fed itself, but is typically 10%[4] of the total value of the bank’s demand accounts (depending on bank size). In the range of $9.3 million to $43.9 million, for transaction deposits (checking accounts, NOWs, and other deposits that can be used to make payments) the reserve requirement in 2007-2008 was 3 percent of the end-of-the-day daily average amount held over a two-week period. Transaction deposits over $43.9 million held at the same depository institution carried a 10 percent reserve requirement.

For example, assume a particular U.S. depository institution, in the normal course of business, issues a loan. This dispenses money and decreases the ratio of bank reserves to money loaned. If its reserve ratio drops below the legally required minimum, it must add to its reserves to remain compliant with Federal Reserve regulations. The bank can borrow the requisite funds from another bank that has a surplus in its account with the Fed. The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

The nominal rate is a target set by the governors of the Federal Reserve, which they enforce by open market operations and adjusting the interest paid on required and excess reserve balances. That nominal rate is almost always what is meant by the media referring to the Federal Reserve “changing interest rates.” The actual federal funds rate generally lies within a range of that target rate, as the Federal Reserve cannot set an exact value through open market operations.

Another way banks can borrow funds to keep up their required reserves is by taking a loan from the Federal Reserve itself at the discount window. These loans are subject to audit by the Fed, and the discount rate is usually higher than the federal funds rate. Confusion between these two kinds of loans often leads to confusion between the federal funds rate and the discount rate. Another difference is that while the Fed cannot set an exact federal funds rate, it does set the specific discount rate.

The federal funds rate target is decided by the governors at Federal Open Market Committee (FOMC) meetings. The FOMC members will either increase, decrease, or leave the rate unchanged depending on the meeting’s agenda and the economic conditions of the U.S. It is possible to infer the market expectations of the FOMC decisions at future meetings from the Chicago Board of Trade (CBOT) Fed Funds futures contracts, and these probabilities are widely reported in the financial media.

Applications

Interbank borrowing is essentially a way for banks to quickly raise money. For example, a bank may want to finance a major industrial effort but may not have the time to wait for deposits or interest (on loan payments) to come in. In such cases the bank will quickly raise this amount from other banks at an interest rate equal to or higher than the Federal funds rate.

Raising the federal funds rate will dissuade banks from taking out such inter-bank loans, which in turn will make cash that much harder to procure. Conversely, dropping the interest rates will encourage banks to borrow money and therefore invest more freely.[5] This interest rate is used as a regulatory tool to control how freely the U.S. economy operates.

By setting a higher discount rate the Federal Bank discourages banks from requisitioning funds from the Federal Bank, yet positions itself as a lender of last resort.

Comparison with LIBOR

Though the London Interbank Offered Rate (LIBOR) and the federal funds rate are concerned with the same action, i.e. interbank loans, they are distinct from one another, as follows:

  • The target federal funds rate is a target interest rate that is set by the FOMC for implementing U.S. monetary policies.
  • The (effective) federal funds rate is achieved through open market operations at the Domestic Trading Desk at the Federal Reserve Bank of New York which deals primarily in domestic securities (U.S. Treasury and federal agencies’ securities).[6]
  • LIBOR is based on a questionnaire where a selection of banks guess the rates at which they could borrow money from other banks.
  • LIBOR may or may not be used to derive business terms. It is not fixed beforehand and is not meant to have macroeconomic ramifications.[7]

Predictions by the market

Considering the wide impact a change in the federal funds rate can have on the value of the dollar and the amount of lending going to new economic activity, the Federal Reserve is closely watched by the market. The prices of Option contracts on fed funds futures (traded on the Chicago Board of Trade) can be used to infer the market’s expectations of future Fed policy changes. Based on CME Group 30-Day Fed Fund futures prices, which have long been used to express the market’s views on the likelihood of changes in U.S. monetary policy, the CME Group FedWatch tool allows market participants to view the probability of an upcoming Fed Rate hike. One set of such implied probabilities is published by the Cleveland Fed.

Historical rates

As of December 16, 2008, the most recent change the FOMC has made to the funds target rate is a 75 to 100 basis point cut from 1.0% to a range of zero to 0.25%. According to Jack A. Ablin, chief investment officer at Harris Private Bank, one reason for this unprecedented move of having a range, rather than a specific rate, was because a rate of 0% could have had problematic implications for money market funds, whose fees could then outpace yields.[8] This followed the 50 basis point cut on October 29, 2008, and the unusually large 75 basis point cut made during a special January 22, 2008 meeting, as well as a 50 basis point cut on January 30, 2008, a 75 basis point cut on March 18, 2008, and a 50 basis point cut on October 8, 2008.[9]

Federal funds rate history and recessions.png

Explanation of federal funds rate decisions

When the Federal Open Market Committee wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, price normally falls. The price here is the interest rate (cost of money) and specifically refers to the Federal Funds Rate. Conversely, when the Committee wishes to increase the Fed Funds Rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, price (or in this case interest rates) will normally rise.[10]

The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee’s lowering has recently predated recessions,[9] in order to stimulate the economy and cushion the fall. Reducing the Fed Funds Rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.

The charts linked below show the relation between S&P 500 and interest rates.

  • July 13, 1990 — Sept 4, 1992: 8.00%–3.00% (Includes 1990–1991 recession)[11][12]
  • Feb 1, 1995 — Nov 17, 1998: 6.00–4.75 [13][14][15]
  • May 16, 2000 — June 25, 2003: 6.50–1.00 (Includes 2001 recession)[16][17][18]
  • June 29, 2006 — (Oct. 29 2008): 5.25–1.00[19]
  • Dec 16, 2008 — 0.0–0.25[20]
  • Dec 16, 2015 — 0.25-0.50[21]
  • Dec 14, 2016 — 0.50-0.75[22]
  • Mar 15, 2017 — 0.75-1.00[23]

Bill Gross of PIMCO suggested that in the prior 15 years ending in 2007, in each instance where the fed funds rate was higher than the nominal GDP growth rate, assets such as stocks and/or housing fell.[24]

See also

References

  1. Jump up^ “Fedpoints: Federal Funds”. Federal Reserve Bank of New York. August 2007. Retrieved 2 October 2011.
  2. Jump up^ “The Implementation of Monetary Policy”. The Federal Reserve System: Purposes & Functions (PDF). Washington, D.C.: Federal Reserve Board. 24 August 2011. p. 4. Retrieved 2 October 2011.
  3. Jump up^ “Monetary Policy, Open Market Operations”. Federal Reserve Bank. 2008-01-30. Retrieved 2008-01-30.
  4. Jump up^ “Reserve Requirements”. Board of Governors of The Federal Reserve System. December 16, 2015.
  5. Jump up^ “Fed funds rate”. Bankrate, Inc. March 2016.
  6. Jump up^ Cheryl L. Edwards (November 1997). Gerard Sinzdak. “Open Market Operations in the 1990s” (PDF). Federal Reserve Bulletin (PDF).
  7. Jump up^ “BBA LIBOR – Frequently asked questions”. British Bankers’ Association. March 21, 2006. Archived from the original on 2007-02-16.
  8. Jump up^ “4:56 p.m. US-Closing Stocks”. Associated Press. December 16, 2008.[dead link]
  9. ^ Jump up to:a b “Historical Changes of the Target Federal Funds and Discount Rates, 1971 to present”. New York Federal Reserve Branch. February 19, 2010. Archived from the original on December 21, 2008.
  10. Jump up^ David Waring (2008-02-19). “An Explanation of How The Fed Moves Interest Rates”. InformedTrades.com. Archived from the original on 2015-05-05. Retrieved 2009-07-20.
  11. Jump up^ “$SPX 1990-06-12 1992-10-04 (rate drop chart)”. StockCharts.com.
  12. Jump up^ “$SPX 1992-08-04 1995-03-01 (rate rise chart)”. StockCharts.com.
  13. Jump up^ “$SPX 1995-01-01 1997-01-01 (rate drop chart)”. StockCharts.com.
  14. Jump up^ “$SPX 1996-12-01 1998-10-17 (rate drop chart)”. StockCharts.com.
  15. Jump up^ “$SPX 1998-09-17 2000-06-16 (rate rise chart)”. StockCharts.com.
  16. Jump up^ “$SPX 2000-04-16 2002-01-01 (rate drop chart)”. StockCharts.com.
  17. Jump up^ “$SPX 2002-01-01 2003-07-25 (rate drop chart)”. StockCharts.com.
  18. Jump up^ “$SPX 2003-06-25 2006-06-29 (rate rise chart)”. StockCharts.com.
  19. Jump up^ “$SPX 2006-06-29 2008-06-01 (rate drop chart)”. StockCharts.com.
  20. Jump up^ “Press Release”. Board of Governors of The Federal Reserve System. December 16, 2008.
  21. Jump up^ “Open Market Operations”. Board of Governors of The Federal Reserve System. December 16, 2015.
  22. Jump up^ “Decisions Regarding Monetary Policy Implementation”. Board of Governors of The Federal Reserve System.
  23. Jump up^ Cox, Jeff (2017-03-15). “Fed raises rates at March meeting”. CNBC. Retrieved 2017-03-15.
  24. Jump up^ Shaw, Richard (January 7, 2007). “The Bond Yield Curve as an Economic Crystal Ball”. Retrieved 3 April 2011.

External links

https://en.wikipedia.org/wiki/Federal_funds_rate

Monetary policy of the United States

From Wikipedia, the free encyclopedia
  (Redirected from U.S. monetary policy)
United States M2 money supply
% change in money supply
Money supply changes monthly basis

Monetary policy concerns the actions of a central bank or other regulatory authorities that determine the size and rate of growth of the money supply.

In the United States, the Federal Reserve is in charge of monetary policy, and implements it primarily by performing operations that influence short-term interest rates.

Money supply[edit]

Main article: Money supply

The money supply has different components, generally broken down into “narrow” and “broad” money, reflecting the different degrees of liquidity (‘spendability’) of each different type, as broader forms of money can be converted into narrow forms of money (or may be readily accepted as money by others, such as personal checks).[1]

For example, demand deposits are technically promises to pay on demand, while savings deposits are promises to pay subject to some withdrawal restrictions, and Certificates of Deposit are promises to pay only at certain specified dates; each can be converted into money, but “narrow” forms of money can be converted more readily. The Federal Reserve directly controls only the most narrow form of money, physical cash outstanding along with the reserves of banks throughout the country (known as M0 or the monetary base); the Federal Reserve indirectly influences the supply of other types of money.[1]

Broad money includes money held in deposit balances in banks and other forms created in the financial system. Basic economics also teaches that the money supply shrinks when loans are repaid;[2][3] however, the money supply will not necessarily decrease depending on the creation of new loans and other effects. Other than loans, investment activities of commercial banks and the Federal Reserve also increase and decrease the money supply.[4] Discussion of “money” often confuses the different measures and may lead to misguided commentary on monetary policy and misunderstandings of policy discussions.[5]

Structure of modern US institutions[edit]

Federal Reserve[edit]

Monetary policy in the US is determined and implemented by the US Federal Reserve System, commonly referred to as the Federal Reserve. Established in 1913 by the Federal Reserve Act to provide central banking functions,[6] the Federal Reserve System is a quasi-public institution. Ostensibly, the Federal Reserve Banks are 12 private banking corporations;[7][8][9] they are independent in their day-to-day operations, but legislatively accountable to Congress through the auspices of Federal Reserve Board of Governors.

The Board of Governors is an independent governmental agency consisting of seven officials and their support staff of over 1800 employees headquartered in Washington, D.C.[10] It is independent in the sense that the Board currently operates without official obligation to accept the requests or advice of any elected official with regard to actions on the money supply,[11]and its methods of funding also preserve independence. The Governors are nominated by the President of the United States, and nominations must be confirmed by the U.S. Senate.[12]

The presidents of the Federal Reserve Banks are nominated by each bank’s respective Board of Directors, but must also be approved by the Board of Governors of the Federal Reserve. The Chairman of the Federal Reserve Board is generally considered to have the most important position, followed by the president of the Federal Reserve Bank of New York.[12] The Federal Reserve System is primarily funded by interest collected on their portfolio of securities from the US Treasury, and the Fed has broad discretion in drafting its own budget,[13] but, historically, nearly all the interest the Federal Reserve collects is rebated to the government each year.[14]

The Federal Reserve has three main mechanisms for manipulating the money supply. It can buy or sell treasury securities. Selling securities has the effect of reducing the monetary base (because it accepts money in return for purchase of securities), taking that money out of circulation. Purchasing treasury securities increases the monetary base (because it pays out hard currency in exchange for accepting securities). Secondly, the discount rate can be changed. And finally, the Federal Reserve can adjust the reserve requirement, which can affect the money multiplier; the reserve requirement is adjusted only infrequently, and was last adjusted in 1992.[15]

In practice, the Federal Reserve uses open market operations to influence short-term interest rates, which is the primary tool of monetary policy. The federal funds rate, for which the Federal Open Market Committee announces a target on a regular basis, reflects one of the key rates for interbank lending. Open market operations change the supply of reserve balances, and the federal funds rate is sensitive to these operations.[16]

In theory, the Federal Reserve has unlimited capacity to influence this rate, and although the federal funds rate is set by banks borrowing and lending funds to each other, the federal funds rate generally stays within a limited range above and below the target (as participants are aware of the Fed’s power to influence this rate).

Assuming a closed economy, where foreign capital or trade does not affect the money supply, when money supply increases, interest rates go down. Businesses and consumers have a lower cost of capital and can increase spending and capital improvement projects. This encourages short-term growth. Conversely, when the money supply falls, interest rates go up, increasing the cost of capital and leading to more conservative spending and investment. The Federal reserve increases interest rates to combat Inflation.

U.S. Treasury[edit]

Private commercial banks[edit]

When money is deposited in a bank, it can then be lent out to another person. If the initial deposit was $100 and the bank lends out $100 to another customer the money supply has increased by $100. However, because the depositor can ask for the money back, banks have to maintain minimum reserves to service customer needs. If the reserve requirement is 10% then, in the earlier example, the bank can lend $90 and thus the money supply increases by only $90. The reserve requirement therefore acts as a limit on this multiplier effect. Because the reserve requirement only applies to the more narrow forms of money creation (corresponding to M1), but does not apply to certain types of deposits (such as time deposits), reserve requirements play a limited role in monetary policy.[17]

Money creation[edit]

Main article: Money creation

Currently, the US government maintains over US$800 billion in cash money (primarily Federal Reserve Notes) in circulation throughout the world,[18][19] up from a sum of less than $30 billion in 1959. Below is an outline of the process which is currently used to control the amount of money in the economy. The amount of money in circulation generally increases to accommodate money demanded by the growth of the country’s production. The process of money creation usually goes as follows:

  1. Banks go through their daily transactions. Of the total money deposited at banks, significant and predictable proportions often remain deposited, and may be referred to as “core deposits.” Banks use the bulk of “non-moving” money (their stable or “core” deposit base) by loaning it out.[20] Banks have a legal obligation to keep a certain fraction of bank deposit money on-hand at all times.[21]
  2. In order to raise additional money to cover excess spending, Congress increases the size of the National Debt by issuing securities typically in the form of a Treasury Bond[22] (see United States Treasury security). It offers the Treasury security for sale, and someone pays cash to the government in exchange. Banks are often the purchasers of these securities, and these securities currently play a crucial role in the process.
  3. The 12-person Federal Open Market Committee, which consists of the heads of the Federal Reserve System (the seven Federal governors and five bank presidents), meets eight times a year to determine how they would like to influence the economy.[23] They create a plan called the country’s “monetary policy” which sets targets for things such as interest rates.[24]
  4. Every business day, the Federal Reserve System engages in Open market operations.[25] If the Federal Reserve wants to increase the money supply, it will buy securities (such as U.S. Treasury Bonds) anonymously from banks in exchange for dollars. If the Federal Reserve wants to decrease the money supply, it will sell securities to the banks in exchange for dollars, taking those dollars out of circulation.[26][27] When the Federal Reserve makes a purchase, it credits the seller’s reserve account (with the Federal Reserve). The money that it deposits into the seller’s account is not transferred from any existing funds, therefore it is at this point that the Federal Reserve has created High-powered money.
  5. By means of open market operations, the Federal Reserve affects the free reserves of commercial banks in the country.[28] Anna Schwartz explains that “if the Federal Reserve increases reserves, a single bank can make loans up to the amount of its excess reserves, creating an equal amount of deposits”.[26][27][29]
  6. Since banks have more free reserves, they may loan out the money, because holding the money would amount to accepting the cost of foregone interest[28][30] When a loan is granted, a person is generally granted the money by adding to the balance on their bank account.[31]
  7. This is how the Federal Reserve’s high-powered money is multiplied into a larger amount of broad money, through bank loans; as written in a particular case study, “as banks increase or decrease loans, the nation’s (broad) money supply increases or decreases.”[3] Once granted these additional funds, the recipient has the option to withdraw physical currency (dollar bills and coins) from the bank, which will reduce the amount of money available for further on-lending (and money creation) in the banking system.[32]
  8. In many cases, account-holders will request cash withdrawals, so banks must keep a supply of cash handy. When they believe they need more cash than they have on hand, banks can make requests for cash with the Federal Reserve. In turn, the Federal Reserve examines these requests and places an order for printed money with the US Treasury Department.[33] The Treasury Department sends these requests to the Bureau of Engraving and Printing (to make dollar bills) and the Bureau of the Mint (to stamp the coins).
  9. The U.S. Treasury sells this newly printed money to the Federal Reserve for the cost of printing.[citation needed] This is about 6 cents per bill for any denomination.[34] Aside from printing costs, the Federal Reserve must pledge collateral (typically government securities such as Treasury bonds) to put new money, which does not replace old notes, into circulation.[35]This printed cash can then be distributed to banks, as needed.

Though the Federal Reserve authorizes and distributes the currency printed by the Treasury (the primary component of the narrow monetary base), the broad money supply is primarily created by commercial banks through the money multiplier mechanism.[29][31][36][37] One textbook summarizes the process as follows:

“The Fed” controls the money supply in the United States by controlling the amount of loans made by commercial banks. New loans are usually in the form of increased checking account balances, and since checkable deposits are part of the money supply, the money supply increases when new loans are made …[38]

This type of money is convertible into cash when depositors request cash withdrawals, which will require banks to limit or reduce their lending.[39][32] The vast majority of the broad money supply throughout the world represents current outstanding loans of banks to various debtors.[38][40][41] A very small amount of U.S. currency still exists as “United States Notes“, which have no meaningful economic difference from Federal Reserve notes in their usage, although they departed significantly in their method of issuance into circulation. The currency distributed by the Federal Reserve has been given the official designation of “Federal Reserve Notes.”[42]

Significant effects[edit]

Main article: Monetary policy

In 2005, the Federal Reserve held approximately 9% of the national debt[43] as assets against the liability of printed money. In previous periods, the Federal Reserve has used other debt instruments, such as debt securities issued by private corporations. During periods when the national debt of the United States has declined significantly (such as happened in fiscal years 1999 and 2000), monetary policy and financial markets experts have studied the practical implications of having “too little” government debt: both the Federal Reserve and financial markets use the price information, yield curve and the so-called risk free rate extensively.[44]

Experts are hopeful that other assets could take the place of National Debt as the base asset to back Federal Reserve notes, and Alan Greenspan, long the head of the Federal Reserve, has been quoted as saying, “I am confident that U.S. financial markets, which are the most innovative and efficient in the world, can readily adapt to a paydown of Treasury debt by creating private alternatives with many of the attributes that market participants value in Treasury securities.”[45] In principle, the government could still issue debt securities in significant quantities while having no net debt, and significant quantities of government debt securities are also held by other government agencies.

Although the U.S. government receives income overall from seigniorage, there are costs associated with maintaining the money supply.[41][46] Leading ecological economist and steady-state theorist Herman Daly, claims that “over 95% of our [broad] money supply [in the United States] is created by the private banking system (demand deposits) and bears interest as a condition of its existence,”[41] a conclusion drawn from the Federal Reserve’s ultimate dependence on increased activity in fractional reserve lending when it exercises open market operations.[47]Economist Eric Miller criticizes Daly’s logic because money is created in the banking system in response to demand for the money,[48] which justifies cost.[citation needed]

Thus, use of expansionary open market operations typically generates more debt in the private sector of society (in the form of additional bank deposits).[49] The private banking system charges interest to borrowers as a cost to borrow the money.[3][31][50] The interest costs are borne by those that have borrowed,[3][31] and without this borrowing, open market operations would be unsuccessful in maintaining the broad money supply,[30] though alternative implementations of monetary policy could be used. Depositors of funds in the banking system are paid interest on their savings (or provided other services, such as checking account privileges or physical security for their “cash”), as compensation for “lending” their funds to the bank.

Increases (or contractions) of the money supply corresponds to growth (or contraction) in interest-bearing debt in the country.[3][30][41] The concepts involved in monetary policy may be widely misunderstood in the general public, as evidenced by the volume of literature on topics such as “Federal Reserve conspiracy” and “Federal Reserve fraud.”[51]

Uncertainties

A few of the uncertainties involved in monetary policy decision making are described by the federal reserve:[52]

  • While these policy choices seem reasonably straightforward, monetary policy makers routinely face certain notable uncertainties. First, the actual position of the economy and growth in aggregate demand at any time are only partially known, as key information on spending, production, and prices becomes available only with a lag. Therefore, policy makers must rely on estimates of these economic variables when assessing the appropriate course of policy, aware that they could act on the basis of misleading information. Second, exactly how a given adjustment in the federal funds rate will affect growth in aggregate demand—in terms of both the overall magnitude and the timing of its impact—is never certain. Economic models can provide rules of thumb for how the economy will respond, but these rules of thumb are subject to statistical error. Third, the growth in aggregate supply, often called the growth in potential output, cannot be measured with certainty.
  • In practice, as previously noted, monetary policy makers do not have up-to-the-minute information on the state of the economy and prices. Useful information is limited not only by lags in the collection and availability of key data but also by later revisions, which can alter the picture considerably. Therefore, although monetary policy makers will eventually be able to offset the effects that adverse demand shocks have on the economy, it will be some time before the shock is fully recognized and—given the lag between a policy action and the effect of the action on aggregate demand—an even longer time before it is countered. Add to this the uncertainty about how the economy will respond to an easing or tightening of policy of a given magnitude, and it is not hard to see how the economy and prices can depart from a desired path for a period of time.
  • The statutory goals of maximum employment and stable prices are easier to achieve if the public understands those goals and believes that the Federal Reserve will take effective measures to achieve them.
  • Although the goals of monetary policy are clearly spelled out in law, the means to achieve those goals are not. Changes in the FOMC’s target federal funds rate take some time to affect the economy and prices, and it is often far from obvious whether a selected level of the federal funds rate will achieve those goals.

Opinions of the Federal Reserve

The Federal Reserve is lauded by some economists, while being the target of scathing criticism by other economists, legislators, and sometimes members of the general public. The former Chairman of the Federal Reserve Board, Ben Bernanke, is one of the leading academic critics of the Federal Reserve’s policies during the Great Depression.[53]

Achievements

One of the functions of a central bank is to facilitate the transfer of funds through the economy, and the Federal Reserve System is largely responsible for the efficiency in the banking sector. There have also been specific instances which put the Federal Reserve in the spotlight of public attention. For instance, after the stock market crash in 1987, the actions of the Fed are generally believed to have aided in recovery. Also, the Federal Reserve is credited for easing tensions in the business sector with the reassurances given following the 9/11 terrorist attacks on the United States.[54]

Criticisms

The Federal Reserve has been the target of various criticisms, involving: accountability, effectiveness, opacity, inadequate banking regulation, and potential market distortion. Federal Reserve policy has also been criticized for directly and indirectly benefiting large banks instead of consumers. For example, regarding the Federal Reserve’s response to the 2007–2010 financial crisis, Nobel laureate Joseph Stiglitz explained how the U.S. Federal Reserve was implementing another monetary policy —creating currency— as a method to combat the liquidity trap.[55]

By creating $600 billion and inserting this directly into banks the Federal Reserve intended to spur banks to finance more domestic loans and refinance mortgages. However, banks instead were spending the money in more profitable areas by investing internationally in emerging markets. Banks were also investing in foreign currencies which Stiglitz and others point out may lead to currency wars while China redirects its currency holdings away from the United States.[56]

Auditing

The Federal Reserve is subject to different requirements for transparency and audits than other government agencies, which its supporters claim is another element of the Fed’s independence. Although the Federal Reserve has been required by law to publish independently audited financial statements since 1999, the Federal Reserve is not audited in the same way as other government agencies. Some confusion can arise because there are many types of audits, including: investigative or fraud audits; and financial audits, which are audits of accounting statements; there are also compliance, operational, and information system audits.

The Federal Reserve’s annual financial statements are audited by an outside auditor. Similar to other government agencies, the Federal Reserve maintains an Office of the Inspector General, whose mandate includes conducting and supervising “independent and objective audits, investigations, inspections, evaluations, and other reviews of Board programs and operations.”[57] The Inspector General’s audits and reviews are available on the Federal Reserve’s website.[58][59]

The Government Accountability Office (GAO) has the power to conduct audits, subject to certain areas of operations that are excluded from GAO audits; other areas may be audited at specific Congressional request, and have included bank supervision, government securities activities, and payment system activities.[60][61] The GAO is specifically restricted any authority over monetary policy transactions;[60] the New York Times reported in 1989 that “such transactions are now shielded from outside audit, although the Fed influences interest rates through the purchase of hundreds of billions of dollars in Treasury securities.”[62] As mentioned above, it was in 1999 that the law governing the Federal Reserve was amended to formalize the already-existing annual practice of ordering independent audits of financial statements for the Federal Reserve Banks and the Board;[63] the GAO’s restrictions on auditing monetary policy continued, however.[61]

Congressional oversight on monetary policy operations, foreign transactions, and the FOMC operations is exercised through the requirement for reports and through semi-annual monetary policy hearings.[61] Scholars have conceded that the hearings did not prove an effective means of increasing oversight of the Federal Reserve, perhaps because “Congresspersons prefer to bash an autonomous and secretive Fed for economic misfortune rather than to share the responsibility for that misfortune with a fully accountable Central Bank,” although the Federal Reserve has also consistently lobbied to maintain its independence and freedom of operation.[64]

Fulfillment of wider economic goals

By law, the goals of the Fed’s monetary policy are: high employment, sustainable growth, and stable prices.[65]

Critics say that monetary policy in the United States has not achieved consistent success in meeting the goals that have been delegated to the Federal Reserve System by Congress. Congress began to review more options with regard to macroeconomic influence beginning in 1946 (after World War II), with the Federal Reserve receiving specific mandates in 1977 (after the country suffered a period of stagflation).

Throughout the period of the Federal Reserve following the mandates, the relative weight given to each of these goals has changed, depending on political developments.[citation needed] In particular, the theories of Keynesianism and monetarism have had great influence on both the theory and implementation of monetary policy, and the “prevailing wisdom” or consensus view of the economic and financial communities has changed over the years.[66]

  • Elastic currency (magnitude of the money multiplier): the success of monetary policy is dependent on the ability to strongly influence the supply of money available to the citizens. If a currency is highly “elastic” (that is, has a higher money multiplier, corresponding to a tendency of the financial system to create more broad money for a given quantity of base money), plans to expand the money supply and accommodate growth are easier to implement. Low elasticity was one of many factors that contributed to the depth of the Great Depression: as banks cut lending, the money multiplier fell, and at the same time the Federal Reserve constricted the monetary base. The depression of the late 1920s is generally regarded as being the worst in the country’s history, and the Federal Reserve has been criticized for monetary policy which worsened the depression.[67] Partly to alleviate problems related to the depression, the United States transitioned from a gold standard and now uses a fiat currency; elasticity is believed to have been increased greatly.[68]

The value of $1 over time, in 1776 dollars.[70]

  • Stable prices – While some economists would regard any consistent inflation as a sign of unstable prices,[71] policymakers could be satisfied with 1 or 2%;[72] the consensus of “price stability” constituting long-run inflation of 1-2% is, however, a relatively recent development, and a change that has occurred at other central banks throughout the world. Inflation has averaged a 4.22% increase annually following the mandates applied in 1977; historic inflation since the establishment of the Federal Reserve in 1913 has averaged 3.4%.[73] In contrast, some research indicates that average inflation for the 250 years before the system was near zero percent, though there were likely sharper upward and downward spikes in that timeframe as compared with more recent times.[74] Central banks in some other countries, notably the German Bundesbank, had considerably better records of achieving price stability drawing on experience from the two episodes of hyperinflation and economic collapse under the country’s previous central bank.

Inflation worldwide has fallen significantly since former Federal Reserve Chairman Paul Volcker began his tenure in 1979, a period which has been called the Great Moderation; some commentators attribute this to improved monetary policy worldwide, particularly in the Organisation for Economic Co-operation and Development.[75][76]BusinessWeek notes that inflation has been relatively low since mid-1980s[77] and it was during this time that Volcker wrote (in 1995), “It is a sobering fact that the prominence of central banks [such as the Federal Reserve] in this century has coincided with a general tendency towards more inflation, not less. By and large, if the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.'”.

  • Sustainable growth – The growth of the economy may not be sustainable as the ability for households to save money has been on an overall decline[78] and household debt is consistently rising.[79]

Cause of The Great Depression

Money supply decreased significantly between Black Tuesday and the Bank Holiday in March 1933 when there were massive bank runs

Monetarists who believe that the Great Depression started as an ordinary recession but significant policy mistakes by monetary authorities (especially the Federal Reserve) caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.

Public confusion

The Federal Reserve has established a library of information on their websites, however, many experts have spoken about the general level of public confusion that still exists on the subject of the economy; this lack of understanding of macroeconomic questions and monetary policy, however, exists in other countries as well. Critics of the Fed widely regard the system as being “opaque“, and one of the Fed’s most vehement opponents of his time, Congressman Louis T. McFadden, even went so far as to say that “Every effort has been made by the Federal Reserve Board to conceal its powers….”[80]

There are, on the other hand, many economists who support the need for an independent central banking authority, and some have established websites that aim to clear up confusion about the economy and the Federal Reserve’s operations. The Federal Reserve website itself publishes various information and instructional materials for a variety of audiences.

Criticism of government interference

Some economists, especially those belonging to the heterodox Austrian School, criticize the idea of even establishing monetary policy, believing that it distorts investment. Friedrich Hayek won the Nobel Prize for his elaboration of the Austrian business cycle theory.

Briefly, the theory holds that an artificial injection of credit, from a source such as a central bank like the Federal Reserve, sends false signals to entrepreneurs to engage in long-term investments due to a favorably low interest rate. However, the surge of investments undertaken represents an artificial boom, or bubble, because the low interest rate was achieved by an artificial expansion of the money supply and not by savings. Hence, the pool of real savings and resources have not increased and do not justify the investments undertaken.

These investments, which are more appropriately called “malinvestments”, are realized to be unsustainable when the artificial credit spigot is shut off and interest rates rise. The malinvestments and unsustainable projects are liquidated, which is the recession. The theory demonstrates that the problem is the artificial boom which causes the malinvestments in the first place, made possible by an artificial injection of credit not from savings.

According to Austrian economics, without government intervention, interest rates will always be an equilibrium between the time-preferences of borrowers and savers, and this equilibrium is simply distorted by government intervention. This distortion, in their view, is the cause of the business cycle. Some Austrian economists—but by no means all—also support full reserve banking, a hypothetical financial/banking system where banks may not lend deposits. Others may advocate free banking, whereby the government abstains from any interference in what individuals may choose to use as money or the extent to which banks create money through the deposit and lending cycle.

Reserve requirement

The Federal Reserve regulates banking, and one regulation under its direct control is the reserve requirement which dictates how much money banks must keep in reserves, as compared to its demand deposits. Banks use their observation that the majority of deposits are not requested by the account holders at the same time.

Currently, the Federal Reserve requires that banks keep 10% of their deposits on hand.[81] Some countries have no nationally mandated reserve requirements—banks use their own resources to determine what to hold in reserve, however their lending is typically constrained by other regulations.[82] Other factors being equal, lower reserve percentages increases the possibility of Bank runs, such as the widespread runs of 1931. Low reserve requirements also allow for larger expansions of the money supply by actions of commercial banks—currently the private banking system has created much of the broad money supply of US dollars through lending activity. Monetary policy reform calling for 100% reserves has been advocated by economists such as: Irving Fisher,[83] Frank Knight,[84] many ecological economists along with economists of the Chicago School and Austrian School. Despite calls for reform, the nearly universal practice of fractional-reserve banking has remained in the United States.

Criticism of private sector involvement

Historically and to the present day, various social and political movements (such as social credit) have criticized the involvement of the private sector in “creating money”, claiming that only the government should have the power to “make money”. Some proponents also support full reserve banking or other non-orthodox approaches to monetary policy. Various terminology may be used, including “debt money”, which may have emotive or political connotations. These are generally considered to be akin to conspiracy theories by mainstream economists and ignored in academic literature on monetary policy.

See also

https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_States

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The Real Reason Hillary Clinton Lost — Adorable Deplorable Deviants (ADDs) Defeated Democrats — Narcissism Defeated Clinton — Videos

Posted on February 9, 2017. Filed under: Articles, Blogroll, Communications, Computers, Congress, Constitution, Corruption, Crime, Crisis, Cult, Culture, Entertainment, Fraud, Illegal, Immigration, Law, Legal, liberty, Life, Links, media, Money, Movies, Newspapers, People, Philosophy, Photos, Police, Political Correctness, Politics, Presidential Candidates, Press, Radio, Radio, Rants, Raves, Sociology, Strategy, Talk Radio, Taxation, Taxes, Television, Unemployment, Video, War, Wealth, Weather, Welfare, Wisdom, Work, Writing | Tags: , , , , , , , , , , , , , , , |

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Trump regards himself as omniscient, an authority on anything and everything, from aesthetics to ethics. He, therefore, lacks intellectual curiosity and regards outside advice as both superfluous and injurious (because it implies that he is less than perfect). He is likely to surround himself with timid yesmen and sycophantic acolytes and generate an impregnable echo chamber rather than a council of wise men and women.

Trump’s grasp of nuanced reality, weak as it already is, is likely to deteriorate further to the point of paranoid psychosis. Faced with opposition, however tenuous, he is likely to react by scapegoating and by inciting street or state violence against targeted groups. Trump is the state, so his enemies (anyone who as much as voices doubt or disagrees with him) is, by definition, an enemy of the state.

Owing to his self-perceived innate superiority, Trump regards himself as above and transcending laws made by lesser mortals. Laws are meant to trap and ensnare giants like him, to drag him down to the pedestrian level of mediocrity. He plays by the rules only when and if they accord with his predilections and self-interest.

Like all narcissists, Trump believes that he is universally loved, adored, and admired. He attributes this ostensible (and utterly delusional) blanket approbation to his effusive charm and irresistibility. He is firmly convinced that he can motivate people to transgress against their own moral convictions and to break the law, if necessary, just by the sheer force of his monumental personality. Trump idealizes and then rapidly devalues people, collectives, and institutions. Trump is in sempiternal flux: he is inconstant in his judgements, opinions, views, and fleeting attachments.

Trump is intellectually lazy, so he is a firm adherent of shortcuts and of “fake it till you make it”. It is a dangerous approach that led him to botch numerous business deals and inflict untold damage and suffering on thousands of people.

Trump is authoritarian in the worst sense of the word. In his disordered, chaotic mind, he is infallible (incapable of erring), omnipotent (can achieve anything if he just sets his mind to it), and omniscient (needs to learn nothing as he is the fount of all true, intuitive knowledge). This precludes any proper team work, orderly governance, institutional capacity, flow of authority and responsibility, and just plain structure. Trump is an artist, led by inconsistent and intermittent inspiration, not by reliable, old-fashioned perspiration. He is not a self-made man, but a self-conjured caricature of a self-made man. Trump is guided by his alleged inner divine wisdom. He is a malevolent guru and cult leader, not a politician or a statesman.

Ironically, Trump’s much trumpeted grandiosity is fragile because it is based on delusional and fantastic assumptions of perfection and intellectual brilliance which are hard to defend. Hence Trump’s relentless and compulsive pursuit of affirmation and adulation. He needs to be constantly idolized just to feel half human. Criticism and disagreement, however minor and well-intentioned, are perceived as unmitigated threats to the precarious house of cards that is Trump’s personality. Consequently, Trump is sadistically vindictive, aiming not just to counter such countervailing opinions regarding his Godlike status, but to deter and intimidate future critics.

Finally, aiming to disavow his own fragility and the indisputable fact that his public persona is nothing but a fabrication, Trump ostentatiously and volubly abhors and berates the weak, the meek, “losers”, “haters” (of which is a prime example), the disabled, women, minorities, and anyone else who might remind him by their very existence of how far from perfect and brilliant he is. The public Trump is about hatred, resentment, rage, envy, and other negative emotions because he is mercilessly driven by these very demons internally. Trump’s quotidien existence is a Kafkaesque trial in which he stands accused of being a mere, average, not-too-bright, mortal and is constantly found wanting and guilty as charged. His entire life is a desperate, last ditch attempt to prove wrong the prosecution in this never-ending courtroom drama.

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Harvey Molotch –Introduction to Sociology – Culture and Ethnocentrism – New York University — Videos

Posted on January 29, 2017. Filed under: Blogroll, College, College Courses Online Videos, Communications, Culture, Economics, Education, media, People, Philosophy, Photos, Sociology, Sociology, Video, Wealth, Welfare, Wisdom, Work, Writing | Tags: , , , , , |

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Introduction to Sociology – Culture and Ethnocentrism – Part 1

Introduction to Sociology – Culture and Ethnocentrism – Part 2

Harvey Molotch

From Wikipedia, the free encyclopedia

Harvey Luskin Molotch (born January 3, 1940) is an American sociologist known for studies that have reconceptualized power relations in interaction, the mass media, and the city. He helped create the field of environmental sociology and has advanced qualitative methods in the social sciences. In recent years, Molotch helped develop a new field—the sociology of objects. He is currently a professor of Sociology and of Metropolitan Studies at New York University.[1] His Introduction to Sociology is featured as one of NYU Open Education’s courses available to stream freely.[2] Other courses that he teaches include Approaches to Metropolitan Studies and Urban Objects. He is also affiliated with the graduate program in Humanities and Social Thought.[3]

Biography

Molotch was born Harvey Luskin in Baltimore, Maryland, where his family was in the retail car business on one side and the Luskin’s home appliance business on the other. His father, Paul Luskin, died in the Battle of the Bulge in 1944 during World War II. His mother remarried to Nathan Molotch. He received a B.A. in Philosophy from the University of Michigan (1963), with a thesis on John Dewey. He received an M.A. (1966) and Ph.D. (1968) in Sociology from the University of Chicago. He served in the U.S. Army, stationed in Maryland and Virginia, 1961-62.

He taught at the University of California, Santa Barbara from 1967 to 2003. He has also been a visiting professor at Stony Brook University, the University of Essex, and Northwestern University. In 1998-99 he was Centennial Professor at the London School of Economics.

His 1964 marriage to Linda Molotch ended with her death, by car accident, in 1976. The couple had two children, Shana (born 1969), now with two children and living in Northern California and Noah (born 1972), now with two children and living in Boulder Colorado where he is on faculty at University of Colorado as hydrological scientist, as well as research scientist at Jet Propulsion Laboratory. Molotch has lived with his domestic partner, Glenn Wharton, a conservator at the Museum of Modern Art and faculty member at New York University, since 1979.

Ideas

Racial Segregation: Rethinking “White Flight”

Molotch’s early work on “white flight” overturned conventional wisdom on neighborhood change, showing that normal mobility makes neighborhood racial change possible. When blacks constitute the bulk of those who move into the vacancies that result, racial change is made inevitable. The implication of this finding, based on Molotch’s systematic studies of matched neighborhoods (and since replicated by others on large data sets), was that it is the reluctance of whites to move into a changing neighborhood that makes racial integration so difficult to achieve. From a policy perspective, Molotch concluded that while stabilizing neighborhoods would not be easy,the focus needs to be on getting white people to replace the whites who are leaving, rather than talking people who are leaving into staying.

The Santa Barbara Oil Spill and Environmental Sociology

On January 28, 1969, there was a massive eruption of crude oil from Union Oil’s Platform A in the Santa Barbara Channel–an eruption which was to cover much of the coast line of two counties with oil. Molotch saw in this disaster a research opportunity. His article “Oil in Santa Barbara and Power in America” became a founding document of the new field of environmental sociology, and a key contribution to political sociology.

Molotch argued that accident research at the local level might be capable of revealing what political scientists called the “second face of power.” This is a dimension of power ordinarily ignored by traditional community studies which fail to concern themselves with the processes by which bias is mobilized and thus how issues rise and fall.

Molotch’s findings highlighted the extraordinary intransigence of national institutions in the face of local dissent, but more importantly, pointed out the processes and tactics which undermine that dissent and frustrate and radicalize the dissenters. Molotch called for comparable studies of the agriculture industry, the banking industry, and for more accident research at the local level, which might bring to light the larger social arrangements which structure the parameters of such local debate. In this way, research at the local level might serve as an avenue to knowledge about national power. Molotch ended, “Sociologists should be ready when an accident hits in their neighborhood, and then go to work.”

The Mass Media and the Social Construction Framework

Molotch helped introduce the social construction framework to the study of news media. Whereas news accounts had been treated, however critically, as “failed” representations of a presumed reality, Molotch and Marilyn Lester held that every account is a product of the social organization that goes into its production. In founding papers in the sociology of the mass media, Molotch and Lester applied the insights of ethnomethodology to the Santa Barbara oil spill and the way it was covered. They argued for an approach to the mass media which does not look for reality, but for practices of those having the power to determine the experience of others.

In addition, Molotch and Lester recognized that this social construction of the news had a crucial political component, a perspective later endorsed by such media sociologists as W. Lance Bennett. In normal times, Molotch and Lester said, the news is merely the ritualized presentation of the stories of powerful corporate and governmental organizations. Only in certain contexts does the veil of this ruling elite consensus get pushed aside to reveal other possible constructions of the facts. Molotch and Lester pointed to such disruptive contexts as scandals and accidents like the Santa Barbara Oil Spill, while Bennett pointed to significant social issues that break through the normally ritualized conflicts of the two political parties.

Molotch’s work has inspired studies of the social construction of news, of the particular ways that the content of presentation is contingent on the social setting of its production, including the occupational workplace of news professionals as well as the larger societal setting. His more recent work on mass media has included studies of war protest and the stock market.

The City as a Growth Machine

Molotch is probably best known for his book Urban Fortunes (1987, with John Logan), which won sociology’s most prestigious prize for scholarship in 1990. Urban Fortunes builds on Molotch’s 1976 classic paper, “The City as a Growth Machine.” In this body of work, Molotch took the dominant convention of studying urban land use and turned it on its head. The field of urban sociology (as well as urban geography, planning, and economics) was dominated by the idea that cities were basically containers for human action, in which actors competed among themselves for the most strategic parcels of land, and the real estate market reflected the state of that competition. Out of this competition were thought to come the shape of the city and the distribution of social types within it (e.g. banks in the center, affluent residents in the suburbs). Long established notions such as central place theory and the sectoral hypothesis were claims that are more or less “natural” spatial geography evolved from competitive market activity.

Molotch helped reverse the course of urban theory by pointing out that land parcels were not empty fields awaiting human action, but were associated with specific interests—commercial, sentimental, and psychological. Especially important in shaping cities were the real estate interests of those whose properties gain value when growth takes place. These actors make up what Molotch termed “the local growth machine” — a term now standard in the urban studies lexicon. From this perspective, cities need to be studied (and compared) in terms of the organization, lobbying, manipulating, and structuring carried out by these actors. The outcome—the shape of cities and the distribution of their peoples—is thus not due to an interpersonal market or geographic necessities, but to social actions, including opportunistic dealing. Urban Fortunes has influenced hundreds of national and international studies. A twentieth anniversary edition was issued by the University of California Press in 2007 with a new preface.

Other work

Molotch has also conducted a series of studies in conversation analysis on mechanisms such as gaps and silences in human conversation that reveal the way power operates at the micro-interactional level. This work includes a notable collaboration with Mitchell Duneier on talk between men on the street and women passersby. His research builds on writings of Don Zimmerman, Harvey Sacks, Gail Jefferson, and Emanuel Schegloff. Molotch was among the first to utilize ethnomethodology and conversation analysis in the study of traditional sociological topics, bridging what had been regarded as a highly esoteric and specialized approach to micro-sociology with mainstream, macro-level sociological issues such as hegemony and power.

More recently in Where Stuff Comes From, Molotch builds on the work of Howard S. Becker and Bruno Latour, to show how objects and physical artifacts are joint result of various types of actors, most particularly product designers operating within frameworks of technology, regulation, mass tastes, and corporate profits. While neo-Marxists and others have treated “commodity fetishism” as a signal of oppression, repression, and delusion, he uses goods to understand, in a more comprehensive way, just what makes production happen and how artifacts reveal larger social and cultural forces.

Honors and awards

  • Fred Buttel Distinguished Contribution Award, Section on Environment and Technology, American Sociological Association (2009)
  • Lifetime Career Achievement in Urban and Community Scholarship, American Sociological Association Urban and Community Studies Section (2003)
  • ASA Journal Article of the Year in Political Sociology (2001)
  • Robert E. Park Award of the American Sociological Association (1988) (Urban Fortunes)
  • Distinguished Scholarly Publication Award of the American Sociological Association (1990) (Urban Fortunes)
  • Scholar in Residence, Russell Sage Foundation, 2008-2009.
  • Fellow, Center for Advanced Study in the Behavioral Sciences, Stanford, CA (2000)
  • Resident Fellow, Rockefeller Foundation, Bellagio Center, Como Italy (1999)
  • Stice Lecturer in the Social Sciences, University of Washington, Seattle (1996)
  • Distinguished Visiting Professor, University of Lund, Sweden (1995)

Selected publications

  • Toilet: The Public Restroom and the Politics of Sharing. [co-edited with Laura Noren] New York: New York University Press (2010).
  • Where Stuff Comes From: How Toasters, Toilets, Cars, Computers and Many Other Things Come to Be as They Are. New York and London: Routledge (2003).
  • Urban Fortunes: The Political Economy of Place. (With John Logan.) Berkeley and Los Angeles: University of California Press. 1987.
  • “The City as a Growth Machine: Toward a Political Economy of Place.” The American Journal of Sociology, Vol. 82, No. 2 (Sep., 1976), pp. 309–332.
  • “News as Purposive Behavior: On the Strategic Use of Routine Events, Accidents, and Scandals,” American Sociological Review, Vol 39, No. 1 (Feb., 1974), pp. 101–112.
  • Managed Integration: Dilemmas of Doing Good in the City. Berkeley: University of California Press (1972).

References

Harvey Molotch

Professor of Social and Cultural Analysis , Sociology

Ph.D. 1968 (Sociology), M.A. 1966 (Sociology), University of Chicago; B.A. 1963 (Philosophy), University of Michigan.

Office Address:

295 Lafayette Street, 4th Floor
New York, NY 10012

Phone:

(212) 998-3542

Areas of Research/Interest:

Urban development and political economy; the sociology of architecture, design, and consumption; environmental degradation; mechanisms of interactional inequalities.

Fellowships/Honors:

PROSE Award (American Association of Publishers, 2012), Best book in sociology and social work, for Against Security.

Fred Buttel Distinguished Career Contribution to Sociology of Environment and Technology, (ASA Section on Environment and Technology).

Mirra Komarovsky Book Prize, for Where Stuff Comes From, Eastern Sociological Society, 2004.

Helen and Robert Lynd Award for Distinguished Career Achievement in Urban and Community Studies (2003).

Award for Distinguished Contribution to Sociological Scholarship (with John Logan) American Sociological Association (for Urban Fortunes, 1990).

Robert Park Award, Book of the Year in Urban and Community Studies (with John Logan) for Urban Fortunes, (1988).

2001 ASA Outstanding Journal Article of the Year in Political Sociology; Honorable mention, Robert Park Journal Paper Award, Urban and Community Studies Section, American Sociological Association (2000); Fellow, Center for Advanced Studies in the Behavioral Sciences, Stanford, CA (2000); Resident Fellow, Rockefeller Foundation, Bellagio Center, Como Italy (1999); Stice Lecturer in the Social Sciences, University of Washington, Seattle (1996); Distinguished Visiting Professor, University of Lund, Sweden (1995); Award for Distinguished Scholarly Contribution to Sociology, American Sociological Association (1990).

Against Security: How We Go Wrong at Airports, Subways and Other Sites of Ambiguous Danger. Princeton University Press, 2012; Paperback edition, 2014.

molotch_bookshot_2015_small.gif

 

 

 

 

 

 

Toilet: Public Restrooms and the Politics of Sharing (edited with Laura Noren). New York University Press, Fall 2010.

Where Stuff Comes From: How Toasters, Toilets, Cars, Computers and Many Other Things Come to Be as They Are. New York and London: Routledge, 2003.

“History Repeats Itself, but How?: City Character, Urban Tradition, and the Accomplishment of Place.” (with William Freudenburg and Krista Paulsen), American Sociological Review, vol. 65 (December: 791-823) 2000.

Urban Fortunes: The Political Economy of Place (with John Logan). Berkeley and Los Angeles:University of California Press. 1987.

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Updated on 10/22/2015
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Ann Swidler — Introduction to Sociology –University of California, Berkeley — Videos

Posted on January 29, 2017. Filed under: American History, Articles, Blogroll, College, College Courses Online Videos, Congress, Constitution, Culture, Economics, Education, Elections, Employment, Faith, Family, Freedom, Friends, government, government spending, history, History of Economic Thought, Language, Law, liberty, Life, media, People, Philosophy, Politics, Rants, Raves, Sociology, Sociology, Video, Wealth, Welfare, Wisdom, Work, Writing | Tags: , , , , , , , |

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Sociology 1 – Lecture 1

Sociology 1 – Lecture 2

Sociology 1 – Lecture 3

Sociology 1 – Lecture 4

Lecture 5

Milgram Obedience Study

The Milgram Experiment 1962 Full Documentary

Milgram Experiment (Derren Brown)

Sociology 1 – Lecture 6

Sociology 1 – Lecture 7

Sociology 1 – Lecture 8

Sociology 1 – Lecture 9

Sociology 1 – Lecture 10

Sociology 1 – Lecture 11

Sociology 1 – Lecture 12

Sociology 1 – Lecture 13

Review Lecture

Midterm Exam

Sociology 1 – Lecture 14

Sociology 1 – Lecture 15

Sociology 1 – Lecture 16

Sociology 1 – Lecture 17

Sociology 1 – Lecture 18

Sociology 1 – Lecture 19

Sociology 1 – Lecture 20

Sociology 1 – Lecture 21

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Sociology 1 – Lecture 23

Sociology 1 – Lecture 24

Sociology 1 – Lecture 25

Sociology 1 – Lecture 26

Ann Swidler

Ann Swidler

Professor
Research Interests:
Culture, religion, theory, institutionalization, African responses to HIV/AIDS
Office:
444 Barrows
Curriculum Vitae:
Profile:

Ann Swidler (PhD UC Berkeley; BA Harvard) studies the interplay of culture and institutions. She asks how culture works–both how people use it and how it shapes social life. She is best known for her books Talk of Love, and the co-authored works Habits of the Heart and The Good Society, as well as her classic article, “Culture in Action: Symbols and Strategies” (American Sociological Review, 1986).  Her most recent book, Talk of Love: How Culture Matters (Chicago, 2001), examines how actors select among elements of their cultural repertoires and how culture gets organized “from the outside in” by Codes, Contexts, and Institutions. In the co-authored Habits of the Heart and The Good Society, she and her collaborators analyzed the consequences of American individualism for individual selfhood, community, and political and economic institutions. With colleagues from the Canadian Institute for Advanced Research, she has been engaged in an ambitious project to understand the societal determinants of human health and well being.

Swidler’s current research is on cultural and institutional responses to the AIDS epidemic in sub-Saharan Africa. Swidler’s research on AIDS Africa has led both to work on NGOs and the international response to the epidemic and to work on transactional sex, cultural barriers to condom use, and factors that have made the responses to the epidemic more successful in some African countries than in others. She is interested in how the massive international AIDS effort in sub-Saharan Africa–the infusion of money, organizations, programs and projects–interacts with existing cultural and institutional patterns to create new dilemmas and new possibilities. She is exploring these issues from two directions:

From the international side, she examines how the international AIDS effort is structured (who provides money to whom, how collaborative networks are structured, how programs get organized on the ground); why some interventions are favored over others; and what organizational forms international funders opt for.  From the African side, she is exploring why the NGO sector is more robust in some countries than others; when international AIDS efforts stimulate vs. impede or derail local efforts; and what organizational syncretisms sometimes emerge.

Swidler’s most recent work examines African religion and the institutions of African chieftaincy in order to understand the cultural and religious sources of collective capacities for social action.

Professor Swidler teaches sociology of culture, sociology of religion, and sociological theory. Her interests increasingly touch on political sociology, development, and sociology of science and medicine as well.

Representative Publications:

Books

  • 2001 Talk of Love: How Culture Matters (University of Chicago Press).
  • 2001 (eds.), Meaning and Modernity: Religion, Polity, Self (University of California Press). (with Madsen, Sullivan, Tipton)
  • 1996 Inequality by Design: Cracking the Bell Curve Myth (Princeton University Press). (with Fischer, Hout, Jankowski, Lucas, and Voss)
  • 1991 The Good Society (Alfred A. Knopf). (with Bellah, Madsen, Sullivan, and Tipton)
  • 1985 Habits of the Heart: Individualism and Commitment in American Life (University of California Press). (with Bellah, Madsen, Sullivan, and Tipton)
  • 1979 Organization Without Authority: Dilemmas of Social Control in Free Schools (Harvard University Press).

Selected Articles and Chapters

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