Weak Governance and the American Recession

A fascinating article in the NYT about Dr. Nouriel Roubini, points out that the current United States economy was a predictable disaster. He found a pattern and tried to warn people in 2006 of the coming crisis:

Most of these countries also had poorly regulated banking systems plagued by excessive borrowing and reckless lending. Corporate governance was often weak, with cronyism in abundance.

I noted in the article that he wrote a book with Brad Setser, a friend and former colleague of mine. I had tried to convince Brad, I would guess around the same time, that he should work with me on a book about macro-security.

Brad was not convinced. He said he worked in an obscure monetary field that has little or no relevance to information security.

This article reminds me that economics are never far from security, even information security. The economic security of nations and the role of governance are a macro study of the same issues most companies face every day when dealing with information security.

Maybe I’ll ping Roubini about this, although it sounds like he probably is in high demand:

Kenneth Rogoff, an economist at Harvard who has known Roubini for decades, told me that he sees great value in Roubini’s willingness to entertain possible situations that are far outside the consensus view of most economists. “If you’re sitting around at the European Central Bank,” he said, “and you’re asking what’s the worst thing that could happen, the first thing people will say is, ‘Let’s see what Nouriel says.’ ” But Rogoff cautioned against equating that skill with forecasting. Roubini, in other words, might be the kind of economist you want to consult about the possibility of the collapse of the municipal-bond market, but he is not necessarily the kind you ask to predict, say, the rise in global demand for paper clips.

That sounds exactly like the role of a security executive. They might be called a CSO, CISO, Chief Paranoid, or even court jester, but the role they play is critical to maintaining an even balance of information. Many times in my career I have been the only person to say “the data and reports show success highly unlikely and the benefits do not outweigh the risks — proceed with caution”. The first time you tell executives or a board of directors that they are headed for disaster, you can expect resistance. After a disaster you predict, you can bet management will at least ask for your view on all remaining projects.

As I used to say in meetings “it’s nice to look at the clouds during a picnic, but the guy watching ants is the most likely to predict the weather”.

Rebirth of Streetcars in America

Exciting news from the NYT; electric streetcars are coming back to the American urban experience:

…Mayor Michael Coleman of Columbus, Ohio, has come to the same conclusion and is pushing to build a $103 million streetcar network along the city’s High Street connecting Ohio State University with the downtown business district. The loop would be paid for through a 4 percent surcharge on concert tickets, sporting events and downtown parking and a $12.5 million contribution from Ohio State.

“It is directly tied to economic development, and when times are tough in Ohio, we need an additional tool to create jobs,” Mr. Coleman said.

While critics question whether scarce city money would be better spent elsewhere, Mr. Coleman argues that streetcars are important to the city’s growth.

“We have to plan for the future,” he said. “I believe in 10 years, we would ask, ‘Why didn’t we do this?’ It will be 10 times more expensive, and the cost of gas will be unaffordable.”

Wow, this is fantastic. I am really heartened to hear that Mayors are able to see clearly as they strategically plan for affordable and clean public transportation.

A libertarian critic is cited in the article, mostly because he says officials are falling “for the hype”. Hype? This is a concept as old as the hills and the technology is hardly the sort of thing to write home about. The only hype I see is from people who say our standard of living will sustain, let alone improve, if we allow big oil to drill into every last orifice on the globe. That means you too, by the way. Bend over…

“It looks like it’s going to take you somewhere, but it’s only designed to support downtown residents,” [O’Toole] said.

Er, you mean downtown residents including business owners, O’Toole? It not only looks like it will take you somewhere, but it actually does take you somewhere, unlike a car with no gas. Individual ownership of vehicles in the city makes about as much sense as individual ownership of buildings rather than tenant-in-common or condos. Density brings forth economies of scale and benefits from a sum greater than the whole, which I am sure are alien concepts to O’Toole. He would value singular gains more than any shared success, and would probably advocate going in circles like a one-armed man in a rowboat.

Moreover, automobiles and buses are appealing only until you realize that the gasoline engine has a petroleum-based umbilical cord that ultimately chokes urban areas to death. The story I heard was that the tire, oil, and bus manufacturers created holding companies that tried to kill off streetcars in America. They were not only successful, but they recouped their investments in under ten years (due to sales of tires, fuel, and vehicles) as people were coddled into cars since they had no public transportation options. Let us hope those days are in the past for good.

US shuts down cyberspace command

Businessweek says the US is reorganizing its cyberspace command, moving control away from the Air Force:

The Pentagon this week delayed and may kill the Air Force’s nascent Cyberspace Command, according to a memo obtained by The Associated Press. This comes as Russia used a major computer network attack to begin its assault on Georgia.

Sounds like a control struggle is happening within the armed forces. Dissent among American leadership is the next block of the story:

“The Russians just shot down the government command nets so they could cover their incursion,” said Wynne. “This was really one of the first aspects of a coordinated military action that had cyber as a lead force, instead of sending in air planes. We need to figure out a way not only see the attack coming but to block it, and in blocking it chase it home.”

“I think this is a very poor time to send a signal that the United States is not interested in focusing on warfighting in the cyber domain,” Wynne added.

Wynne was fired by Defense Secretary Robert Gates earlier this year after the Air Force’s mishandling of nuclear weapons. Wynne, however, told reporters he was fired over differences with Gates on the need for additional F-22 fighter jets, among other matters.

.

People from the Air Force that I have spoken with have said they disagree with the current Administration’s policies, and some have even suggested that Bush himself is unable to lead or make decisions. They still discuss how he reacted on 9/11. No doubt this grudge makes them a target for reorganization.

The Air Force considers cyberspace a “domain” for which the service should train and equip forces to defend, as it does airspace. There are about 3 million attempted penetrations of Defense Department networks every day, according to the Air Force.

A senior military commander told the AP, however, that the mission to defend U.S. military networks is better vested in U.S. Strategic Command, which has the military responsibility for cyberspace across all services and commands.

The bottom line on this issue is that the problem of DDoS attacks is real and needs to be addressed immediately. Companies like Arbor seem to get it and have been managing the situation for many years already. The risks are known; this stuff is not rocket science, so hopefully the Pentagon is actually getting things organized and moving ahead rather than playing politics and favors to corporations, or lobbyists, etc..

Cyberwar in Georgia

Jose Nazario suggests on his blog that Georgia has not been under cyber attack as some are starting to suggest:

While some are speculating about cyber-warfare and state sponsorship, we have no data to indicate anything of the sort at this time. We are seeing some botnets, some well known and some not so well known, take aim at Georgia websites. Note that RIA Novosti, a Russian news outlet, was apparently targeted during this fighting. Georgian hackers are accused of this event.

Compared to the May 2007 Estonian attacks, these are more intense but have lasted (so far) for less time. This could be due to a number of factors, including more sizable botnets with more bandwidth, better bandwidth at the victims, changes in our observations, or other factors.

Sounds a lot like an uncertainty principle sneaking into the calculations. He points towards other links that say there is no question Georgia is experiencing cyberwarfare. Unfortunately the term is too loosely defined to reconcile the perspectives.

Arbor’s point seems to be that no link to “state sponsorship” has been proven and so the attacks are not classified under warfare. On the other hand, political analysis done by Jose Nazario in his July 20th review of a DDoS that targeted the website for the President of Georgia highlights Russia-Georgia tension. Moreover The Register claims a link to state-sponsored system has been uncovered.

Arbor continues to prove that “weather map” technology for network behavior is one of the best ways to anticipate more conventional risks.