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“Non-Factual Facts”: Washington Post Hedges Claim That Google, Facebook, Gave The Government Direct Access To Their Servers

Yesterday, the Washington Post reported a shocking story about how the FBI and National Security Agency had partnered with Google, Facebook, and many other tech companies to spy on the tech companies’ hundreds of millions of users.

The government agencies, the Post said, were “tapping directly into the central servers of nine leading U.S. Internet companies, extracting audio, video, photographs, e-mails, documents and connection logs that enable analysts to track a person’s movements and contacts over time.”

This surveillance program, the Post reported, had been “knowingly” facilitated by the tech companies, which had allowed the government to tap directly into their central servers.

The Post story described a “career intelligence officer” as being so horrified by the power and privacy intrusion of this surveillance system that the officer was helping to leak the news to expose it.

“They quite literally can watch your ideas form as you type,” the officer reportedly told the Post.

Not surprisingly, the Post’s story created an instant explosion of outrage. The ire was directed at both the government and the technology companies.

The story also led to immediate, explicit denials from the technology companies. Google, Facebook, and Yahoo all said that the government did not have “direct access” to any servers. Apple said it had never even heard of the program it was supposedly partnering with.

So The Post’s claim that the companies had voluntarily given the government direct, open, un-monitored access to their servers quickly seemed suspect.

And now, 24 hours later, after more denials and questions, the Post has made at least two important changes to its spying story.

First, the Post has eliminated the assertion that the technology companies “knowingly” participated in the government spying program.

Second, and more importantly, the Post has hedged its assertion that the companies have granted the government direct access to their servers.

The latter change is subtle, but important. In the first version of its story, the Post stated as a fact that the government had been given direct access to the companies’ servers.

Now, the Post attributes the claim to a government presentation–a document that has been subjected to significant scrutiny and skepticism over the past day and that, in this respect, at least, seems inaccurate.

In other words, the Post appears to have essentially retracted the most startling and important part of its story: That the country’s largest technology companies have voluntarily given the government direct access to their central servers so the government can spy on the tech companies’ users in real time.

Specifically, here’s how the Washington Post story has changed…

Here’s the original first paragraph:

The National Security Agency and the FBI are tapping directly into the central servers of nine leading U.S. Internet companies, extracting audio, video, photographs, e-mails, documents and connection logs that enable analysts to track a person’s movements and contacts over time.

Here’s the updated paragraph (our emphasis):

The National Security Agency and the FBI are tapping directly into the central servers of nine leading U.S. Internet companies, extracting audio and video chats, photographs, e-mails, documents, and connection logs that enable analysts to track foreign targets, according to a top-secret document obtained by The Washington Post.

That change is important. The direct-access claim changes from a fact asserted by the Washington Post to a claim made in a document the Washington Post has seen–a document that might be wrong.

The idea that Google, Facebook, Apple, et al, had voluntarily given the government direct unfettered access to their servers always seemed far-fetched.

This behavior would justifiably trigger the wrath of the companies’ hundreds of millions of users worldwide and exacerbate already existing concerns that these companies routinely trample all over their users’ privacy.

Furthermore, the government’s assertions that its spying programs are directed primarily at foreigners, not US citizens, would not be viewed as comforting to Google, Facebook, et al.

Why not?

Because the vast majority of the users of these companies’ services are foreigners.

If the international users of Facebook, Google, et al, were to feel that the companies were opening their data centers in this way, the international users might revolt. So it’s hard to imagine that these companies would just voluntarily open their servers to the U.S. government (or, for that matter, any other government).

The Washington Post also broke the news about the existence of the vast government program Internet spying called PRISM, which other outlets have since confirmed. And the story illustrated how extensively the government uses Internet communications in its intelligence efforts and how important these communications are to national security.

But, a day after the Post story appeared, it seems likely that the following claims are wrong or at least need major qualification:

  • that the NSA and FBI are “tapping directly into the central servers” of Facebook, Google, et al, and,
  • that the government can “quite literally watch your ideas form as you type.”

 

By: Henry Blodget, Business Insider, June 7, 2013

June 9, 2013 Posted by | National Security | , , , , , , , , | Leave a comment

“Improving The Quality Of Life”: It’s Time To Get Serious About Science

Some policymakers, including certain senators and members of Congress, cannot resist ridiculing any research project with an unusual title. Their press releases are perhaps already waiting in the drawer, with blanks for the name of the latest scientist being attacked. The hottest topics for ridicule involve sex, exotic animals and bugs.

The champion of mocking science was the late William Proxmire, whose Golden Fleece Awards enlivened dull Senate floor proceedings from 1975 until 1988. His monthly awards became a staple of news coverage. He generated good laughs back home by talking about a “wacko” in a lab coat experimenting with something seemingly stupid. Proxmire did not invent the mad-scientist stereotype, but he did much to popularize it.

The United States may now risk falling behind in scientific discoveries as other countries increase their science funding. We need to get serious about science. In fact, maybe it’s time for researchers to fight back, to return a comeback for every punch line.

Toward that end, we are announcing this week the winners of the first Golden Goose Awards, which recognize the often-surprising benefits of science to society. Charles H. Townes, for example, is hailed as a primary architect of laser technology. Early in his career, though, he was reportedly warned not to waste resources on an obscure technique for amplifying radiation waves into an intense, continuous stream. In 1964, he shared the Nobel Prize in Physics with Nikolay Basov and Alexander Prokhorov.

Similarly, research on jellyfish nervous systems by Osamu Shimomura, Martin Chalfie and Roger Y. Tsien unexpectedly led to advances in cancer diagnosis and treatment, increased understanding of brain diseases such as Alzheimer’s, and improved detection of poisons in drinking water. In 2008, the trio received the Nobel Prize in Chemistry for this initially silly-seeming research. Four other Golden Goose Award winners — the late Jon Weber as well as Eugene White, Rodney White and Della Roy — developed special ceramics based on coral’s microstructure that is now used in bone grafts and prosthetic eyes.

Across society, we don’t have to look far for examples of basic research that paid off. Larry Page and Sergey Brin, then a National Science Foundation fellow, did not intend to invent the Google search engine. Originally, they were intrigued by a mathematical challenge, so they developed an algorithm to rank Web pages. Today, Google is one of the world’s most highly valued brands, employing more than 30,000 people.

It is human nature to chuckle at a study titled “Acoustic Trauma in the Guinea Pig,” yet this research led to a treatment for hearing loss in infants. Similar examples abound. Transformative technologies such as the Internet, fiber optics, the Global Positioning System, magnetic resonance imaging (MRI), computer touch-screens and lithium-ion batteries were all products of federally funded research.

Yes, “the sex life of the screwworm” sounds funny. But a $250,000 study of this pest, which is lethal to livestock, has, over time, saved the U.S. cattle industry more than $20 billion. Remember: The United States itself is the product of serendipity: Columbus’s voyage was government-funded. Remember, too, that basic science, the seed corn of innovation, is primarily supported by the federal government — not industry, which is typically more interested in applied research and development.

While some policymakers continue to mock these kinds of efforts, researchers have remained focused on improving our quality of life. Scientific know-how, the engine of American prosperity, is especially critical amid intense budgetary pressures. Federal investments in R&D have fueled half of the nation’s economic growth since World War II. This is why a bipartisan team of U.S. lawmakers joined a coalition of science, business and education leaders to launch the Golden Goose Awards.

Federal support for basic science is at risk: We are already investing a smaller share of our economy in science as compared with seven other countries, including Japan, Taiwan and South Korea. Since 1999, the United States has increased R&D funding, as a percentage of the economy, by 10 percent. Over the same period, the share of R&D in the economies of Finland, Germany and Israel have grown about twice as fast. In Taiwan, it has grown five times as fast; in South Korea, six times as fast; in China; 10 times. In the United States, meanwhile, additional budget cuts have been proposed to R&D spending for non-defense areas. If budget-control negotiations fail, drastic across-the-board cuts will take effect in January that could decimate entire scientific fields.

Columbus thought he knew where he was going, but he didn’t know what he had found until many years later. He was searching for the Orient, but he discovered something even better: the New World.

Let’s honor our modern-day explorers. We need more of them. They deserve the last laugh.

 

By: Jim Cooper and Alan I. Leshner, The Washington Post, September 9, 2012

September 10, 2012 Posted by | Science | , , , , , , , , | Leave a comment

“We Hold These Truths To Be Self Evident”: Real Patriots Pay Taxes

Some of our nation’s biggest corporations are planning a tax holiday and they want you to pick up the tab.

Actually, you already pay for their routine tax avoidance through the use of tax havens in Bermuda, the Cayman Islands and elsewhere. These accounting acrobatics cost the U.S. Treasury $100 billion a year. Now they want Congress to pass a special tax holiday for money they “repatriate” back to the United States.

There’s nothing patriotic about this repatriation being pushed by Google, Cisco, Pfizer and other companies in the Win America campaign. To sell the tax holiday, they claim it will produce a burst of jobs and investment. In fact, Congress passed a “one-time-only” tax holiday in 2004 with similar promises. Instead, it produced a burst of shareholder dividends and stock buybacks, which goosed the pay of CEOs.

Corporations laid off workers and shifted even more income and investment to offshore tax havens in the wake of the 2004 tax holiday.

“Why should we reward firms for successfully gaming the tax system when we in turn are called on to make up the missing tax revenues?” Edward Kleinbard, former chief of staff of Congress’s Joint Committee on Taxation, told Bloomberg. “Much of these earnings overseas are reaped from an enormous shell game: Firms move their taxable income from the U.S. and other major economies — where their customers and key employees are in reality located — to tax havens.”

A favorite accounting trick is transferring a patent from the U.S. parent company to a subsidiary — often a shell company — in a tax haven. Profits from the patent go largely untaxed offshore while the costs of development, marketing and management remain in the U.S., where they are taken as tax deductions.

Pfizer was the largest beneficiary of the last tax holiday, bringing $37 billion back to the United States and paying just $1.7 billion in federal corporate income taxes. It laid off 10,000 American workers in the following months. The U.S. is the world’s most profitable drug market and yet over the last three years, Pfizer — maker of Lipitor, Viagra and much more — has reported $7.9 billion in U.S. losses while claiming $37.8 billion in profits in the rest of the world. Pfizer, like the rest of Big Pharma, is heavily subsidized by taxpayer-funded research at the National Institutes of Health and elsewhere. It should not be rewarded with another tax holiday.

Bloomberg reported that “Google reduced its income taxes by $3.1 billion over three years by shifting income to Ireland, then the Netherlands, and ultimately to Bermuda.” What a corporate ingrate. Google would not exist without the Internet, and the Internet grew out of U.S. government research beginning in the 1960s. In the 1990s, the U.S. National Science Foundation funded the Digital Library Initiative research at Stanford University that Larry Page and Sergey Brin, now billionaires, developed into Google. Brin was also supported by an NSF graduate student fellowship.

Increasingly, U.S. multinational corporations want to benefit from government spending on education, infrastructure, research, health care and so on without paying for it. Today, large corporations pay, on average, 18 percent of their profits in federal income taxes and as a group contribute just 9 percent toward federal government bills, down from 32 percent in 1952. The Congressional Joint Committee on Taxation says a new tax holiday would cost $79 billion.

A dozen national and state business organizations led by Business for Shared Prosperity recently wrote members of Congress urging them to oppose the tax holiday. The letter said, “When powerful large U.S. corporations avoid their fair share of taxes, they undermine U.S. competitiveness, contribute to the national debt and shift more of the tax burden to domestic businesses, especially small businesses that create most of the new jobs.”

There is no excuse for repeating a policy that’s a proven failure. It would be even worse this time around, as corporations would redouble their efforts to shift profits overseas in anticipation of the next tax holiday. Congress should close the tax loopholes that reward companies for transferring U.S. profits, jobs and investment abroad — not encourage them.

Real patriots pay their fair share of taxes. They don’t run out on the bill.

 

By: Holly Sklar and Scott Klinger, CommonDreams.org, July 4, 2011

July 4, 2011 Posted by | Big Business, Big Pharma, Capitalism, Class Warfare, Congress, Conservatives, Corporations, Deficits, Democracy, Economic Recovery, Economy, GOP, Government, Jobs, Lawmakers, Middle Class, Offshore Accounts, Politics, Republicans, Tax Evasion, Tax Liabilities, Tax Loopholes, Taxes, Wealthy | , , , , , , , , , , | Leave a comment

Corporate Tax Cuts Don’t Stimulate Job Growth

Prevailing conservative  wisdom dictates that businesses need tax cuts—and investors need capital  gains tax cuts—to get the economy moving. But two very well-executed articles  on wages and taxes published recently suggest that targeting tax cuts at  business executives may do little to improve the dismal unemployment picture.

The Washington Post offers a startling  analysis of income disparity, noting that the gap between the very rich and the rest of us has  grown dramatically in the past few decades, reaching current levels that have  not been seen since the Great Depression. In 2008, the Post reports, the top one-tenth of one percent of earners took in  more than a tenth of the personal income in the United States. But the moneyed  class is not dominated by professional athletes or big-name artistic performers  or even hedge fund managers, the Post found.  Instead, it is due to a big increase in executive compensation, even as real  wages for some of their workers have dropped:

The top 0.1 percent of earners make about $1.7 million or  more, including capital gains. Of those, 41 percent were executives, managers  and supervisors at non-financial companies, according to the analysis, with  nearly half of them deriving most of their income from their ownership in  privately-held firms. An additional 18 percent were managers at financial firms  or financial professionals at any sort of firm. In all, nearly 60 percent fell  into one of those two categories.

The New York Times has a fascinating story that serves as an unwitting companion piece to the Post story. Corporate executives, the  paper reports, are clamoring for a tax holiday to encourage them to bring their  offshore profits back to the United States. And the money in question is big,  the Times notes: Apple has $12 billion  in offshore cash, while Google has $17 billion, and Microsoft, $29 billion. The  companies with money sitting offshore argue that if the federal government were  to offer them a huge tax break—say, a one-year drop from 35 percent to 5.25  percent—the businesses would bring the money home and operate as a  private-sector economic stimulus.

However, the Times notes:

(T)hat’s not how it worked  last time. Congress and the Bush administration offered companies a similar tax  incentive, in 2005, in hopes of spurring domestic hiring and investment, and  800 took advantage. Though the tax break lured them into bringing $312 billion  back to the United States, 92 percent of that money was returned to  shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research.

Who needs a tax cut, then? The U.S. economy is  very much consumer-driven; companies aren’t hiring, many business owners say,  because people aren’t buying. The past behavior of corporations that have  received huge tax cuts has not necessarily been to use the money to hire more  people; the Bush-era tax cuts have been in place for a decade, and the  unemployment rate is still 9.1 percent. And executive compensation has grown.  Executives may feel entitled to earn more and more if their companies are doing  well and expanding. But without customers, those companies will go bust.

By: Susan Milligan, U. S. News and World Report, JUne 20, 2011

June 23, 2011 Posted by | Businesses, Class Warfare, Congress, Conservatives, Consumers, Corporations, Economic Recovery, Economy, GOP, Government, Ideology, Income Gap, Jobs, Labor, Middle Class, Politics, Republicans, Taxes, Unemployment, Wealthy | , , , , , , , , , , , , , , | Leave a comment

To Fix The Budget Deficit, Raise Corporate Taxes

Washington is a town currently gripped by deficit hysteria. Various commissions and congressional “gangs” have formed (and broken up) with the goal of crafting a plan to bring the nation’s budget into balance. Even the media has been sucked into this vortex, dedicating far more of its time to covering the deficit than other economic issues, such as unemployment.

At the same time, both parties seem to agree that the nation’s corporate tax code needs to be reformed. President Obama and House Budget Committee Chairman Paul Ryan each dedicated a portion of their respective budget plans to overhauling the federal corporate income tax, which is high on paper, but so riddled with loopholes, deductions, and outright giveaways that few corporations pay the full statutory rate (and several corporations pay no corporate income tax at all).

This, then, should be an excellent opportunity to kill the proverbial two birds with one stone: cleaning up the corporate tax code, lowering the corporate tax rate, and still raising more revenue that can be put towards deficit reduction.

But no.

Despite all the hyperventilating over the deficit, both Republicans and Democrats have said that they want corporate tax reform to be revenue neutral, meaning no more or less revenue will be raised by the new system than was raised by the old. President Obama and Treasury Secretary Tim Geithner have each extolled the virtues of deficit-neutral corporate tax reform. But if this is actually the road that’s taken, it will constitute a colossal missed opportunity.

At the moment, corporate tax revenue has plunged to historic lows. In 1960, the corporate income tax provided more than 23 percent of federal revenue; the Office of Management and Budget estimates that it will provide less than 10 percent this year.

During the 1960s, the United States consistently raised nearly 4 percent of GDP in corporate revenue. During the 1970s, the total was still above 2.5 percent of GDP. Now, the U.S. raises less than 1.5 percent of GDP from the corporate income tax. As the Congressional Research Service put it, “Despite concerns expressed about the size of the corporate tax rate, current corporate taxes are extremely low by historical standards.”

The United States effective corporate tax rate is also low by international standards (though the 35 percent statutory rate is the second highest in the world). There are plenty of reasons for this drop, but chief among them is the proliferation of loopholes and credits clogging up the corporate tax code (alongside the growing use of offshore tax havens and the ability of corporations to defer taxes on offshore profits indefinitely).

Huge corporations, such as ExxonMobil, have recently had years where they paid literally nothing to the U.S. Treasury, despite making huge profits. The New York Times made waves by finding that General Electric paid no federal income tax last year, instead pocketing hundreds of millions of dollars in tax benefits. Mega-manufacturer Boeing has done the same, paying no federal taxes in 2009 while collecting $132 million in tax benefits. Google last year had a 2.4 percent effective tax rate, while California-based Broadcom’s rate was just 1.4 percent, far below the rate that the average American pays.

The Treasury Department estimated in 2007 that corporate tax preferences cost $1.2 trillion in lost revenue over a decade. So there is ample room to remove credits and deductions (like those that benefit, amongst others, hugely profitable oil companies and agribusinesses), lower the statutory rate, while still bringing in more revenue. Some companies would see their taxes go up, but others would see their tax bills drop, and the corporate tax code would be more fair, efficient, and competitive, while ensuring that all corporations pay their fair share.

As the Center on Budget and Policy Priorities put it, “corporate tax reform is a solid candidate to make a contribution to fiscal improvement … Taking a major revenue source off the table for deficit reduction at the outset would be ill-advised.” Indeed, with corporate profits skyrocketing—up 81 percent over a year ago—and corporations sitting on trillions in cash reserves, there is no reason that corporate tax reform should be done in a way that is deficit neutral, besides the fact that raising more revenue will be politically difficult, as corporations will likely throw their considerable lobbying weight against such a move. But in the end, failing to raise additional corporate tax revenue will simply shift more of the deficit reduction burden onto a middle-class already battered by the Great Recession.

By: Pat Garofalo, U. S. News and World Report, May 25, 2011

May 25, 2011 Posted by | Big Business, Budget, Class Warfare, Congress, Conservatives, Corporations, Deficits, Democrats, Economy, GOP, Government, Ideologues, Ideology, Income Gap, Lawmakers, Media, Middle Class, Politics, Press, Pundits, Regulations, Republicans, Tax Credits, Tax Evasion, Tax Loopholes, Taxes, Unemployed, Unemployment, Wealthy | , , , , , , , , , , , , , , , , , | Leave a comment

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