FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
January 28, 2014

IN THIS ISSUE:

1. President Obama’s January 17 NSA Speech

2. Obama: NSA Spying To Continue, Even If Illegal

3. Obama Pledges No More Spying On Foreigners

4. Obama Ignored Findings & Recos of NSA Review Panels

5. Many Americans Oblivious to NSA Spy Scandal

6. WEBINAR With Niemann Capital on January 30

Overview

On Friday, January 17 President Obama delivered a speech which was heralded in advance as a sweeping change for the nation’s spy agency, the National Security Agency, which has been collecting enormous amounts of phone and other data on the general public for the last several years. The changes Mr. Obama announced in his speech were anything but sweeping. The NSA will continue its massive phone data collection operation, largely unabated.

Prior to the president’s Jan. 17 speech, he met with a special review panel that he appointed last year to investigate the NSA’s phone data operations. The special review panel recommended 46 actions to limit the NSA’s power to collect phone data, and that any action to gather public data must be approved by a court on a case-by-case basis in advance.

The president also met prior to his speech with an independent federal privacy watchdog agency – the Privacy and Civil Liberties Oversight Board – which has recently concluded that the National Security Agency’s program to collect bulk phone call records has provided only “minimal” benefits in counterterrorism efforts, that it is illegal and should be shut down.

Obviously, President Obama did not agree. In his speech he made it clear that the NSA will continue to collect phone data on virtually all Americans, albeit with additional oversight from the courts. Likewise, Mr. Obama took only a few of the 46 recommendations from his review panel. So the spying on all Americans’ phone and other records will continue.

Conservatives and even many liberals were outraged that President Obama elected to leave the NSA’s phone data collection operation largely in place. Pundits on both sides of the aisle know that the Foreign Intelligence Surveillance Act (FISA) court that approves the NSA’s data collection efforts will continue to rubber-stamp the operation.

I have been a strong privacy advocate for most of my adult life and continue to be. At the same time, I recognize the value of our government conducting surveillance on bad guys and terrorists. But spying on the general public at large is over the top in my opinion and should be stopped.

Sadly, many Americans know little or nothing about these recent NSA developments. But regardless of your political persuasion, we ALL need to know about this. That’s what we’ll talk about today.

President Obama’s January 17 NSA Speech

When I saw that the Obama administration had selected Friday, January 17 (ahead of a long MLK weekend) to address a matter as serious as the NSA spying scandal, I knew the president was going to say something controversial that he hoped the media would ignore. (Presidents have often used Fridays to address controversial issues.)

Rather than addressing the massive violations of our constitutionally-protected right to privacy, rather than acknowledging that without Edward Snowden’s decision to leak the NSA intelligence, we would not know we are being spied upon, and rather than re-establishing the serious constitutional and civil liberties he fought for as a senator, the president defended the NSA’s massive spying as a necessary tool in the fight to maintain national security and offered only a few minor changes to its critics.

Just how massive is this scandal? The Washington Post has reported that the NSA hacks into 600,000 American address books and 500,000 electronic “buddy lists” every day. The Guardian of London reported recently that the NSA seizes 200 million American text messages every day.

This is in addition to seizing the “metadata” (date, time, length and to whom) from all cellphone and landline-generated telephone calls and copies of all emails sent or received in the US. And all of that is in addition to seizing electronic bank records, utility bills and credit card bills of millions of Americans.

By not addressing or refuting any of this, the president obviously plans to continue it.

Obama: NSA Spying To Continue, Even If Illegal

In allowing the spying to continue, the president is rejecting one of the most basic principles of American government. If the government derives its powers from the consent of the governed, as the Declaration of Independence states clearly that it does, and if the governed lack the lawful authority to hack and seize our neighbors’ texts and phone calls and utility bills, how could we have given that authority to the government?

In the president’s world, that’s an easy question to answer: Just do it in secret.

Enact legislation that lets a dozen or so powerful members of Congress speak for the legislative branch on matters of national security. Then tell only that dozen about the spying in private and swear them to secrecy.

Enact legislation that lets a dozen secret judges issue search warrants based on the government’s wishes rather than probable cause, and seek permission to spy from any one of those judges behind closed doors and swear them to secrecy. And then in public, deny and lie and change the subject whenever questions are asked about it.

In a thinly disguised effort to change the subject, Obama’s Jan. 17 speech focused on where the seized data is stored, rather than on whether the government has the legal authority to collect it in the first place.

He proposed that the data seized by the NSA be stored at non-government locations that he did not identify (because they don’t exist) and kept there and be made available to the NSA after approval by the secret FISA court. Since we know that the FISA court rubber-stamped the metadata collection operation, we assume the FISA court will also allow the NSA access to the data, even if it is stored somewhere else. That’s no consumer protection at all!

Every federal and state court in the United States follows the constitutional requirement that whenever any government is seeking a search warrant to conduct surveillance, the government must present “particularized evidence” identifying its target, and the evidence must constitute “probable cause” of criminal behavior on the part of that target; every court, that is, except the FISA court. That court issues general warrants that do not name a target and are based on the NSA’s wishes, rather than evidence of probable cause.

So, that silent exhale of relief from the NSA on Jan. 17 was generated by the realization that this third-party storage proposal will not restrict its massive spying one iota – and that assumes the third-party storage proposal even comes to pass. The president punted this idea to Congress to figure out and get back to him with a recommendation by the end of March.

Added to this placebo was the president’s proposal to appoint a “Defender of the Constitution” to appear before the FISA court, along with lawyers for the NSA, and argue against the NSA’s wishes. This is another diversion that would add a new level of unconstitutional and irrelevant complexity to the present scheme.

If the Defender of the Constitution appeared in front of the FISA court, he or she could only do so by representing a real client in a real dispute with the federal government. But the NSA does not identify its targets, much less deal with their lawyers. For this reason, we can only assume that Mr. Obama is not serious about this suggestion.

Obama Pledges No More Spying On Foreigners

His third proposal adds insult to injury. He offers to stop the NSA from doing to foreign leaders what it has been doing to Americans. You’ve no doubt heard that the NSA has been spying on foreign leaders, including some of our closest allies. Obama says we won’t do that in the future, unless we deem it a matter of national security.

The biggest surprise in the speech was the president’s pledge to end spying on foreign citizens abroad. No president before him has made such a pledge. Mr. Obama said:

“People around the world, regardless of their nationality, should know that the United States is not spying on ordinary people who don’t threaten our national security, and that we take their privacy concerns into account in our policies and procedures.

In this directive, I have taken the unprecedented step of extending certain protections that we have for the American people to people overseas [including] safeguards [that] will limit the duration that we can hold personal information, while also restricting the use of this information.” [Emphasis added, GDH.]

Hold on there, Mr. President! You admitted in the first part of your speech that the American people are being spied on by the NSA, and that you intend to keep on doing it, although with different oversight.

Yet now you’re saying that you will end NSA spying on foreign citizens by affording them the same rights and protections as American citizens have via the Constitution – except that we don’t really have them anymore under your administration. This is absolutely deplorable! How does he get away with that? Why is the media not covering this?

At the end of the day, spying on all of us will continue pretty much as is. This mass spying is uniquely and profoundly un-American and will continue to undermine our freedoms. I am not arguing here that all spying is illegal – just that indiscriminate spying on all of US is illegal.

Obama Ignored Findings & Recos of NSA Review Panels

As noted at the beginning, President Obama largely ignored the findings of his own NSA review panel. Last year, the president commissioned a blue-ribbon advisory committee of respected constitutional lawyers and former national security officials.

This five-man panel and its staff conducted the most searching outside review of intelligence-gathering in 40 years, producing a 300-page report with 46 recommendations for changes at the NSA. The president adopted only a few of them, often undermining those he did endorse.

The president was also briefed in advance of his speech by an independent federal privacy watchdog agency – the US Privacy and Civil Liberties Oversight Board (PCLOB) – which also conducted an in-depth review of the NSA’s spying activities last year. The PCLOB board presented Mr. Obama with a 238-page analysis well before his Jan. 17 speech.

The PCLOB determined that the NSA spying operation has provided only “minimal” benefits in counterterrorism efforts. In the one case that did result in the arrest of a terror suspect, the PCLOB determined that authorities would have apprehended the suspect even without the limited intelligence provided by the NSA.

Even more damning, the PCLOB concluded that the NSA spying operation on American citizens is unconstitutional, illegal and should be shut down immediately. Wow! Yet the president chose to ignore the Board’s findings.

It is preposterous that this president would ignore the findings and all but a few of the 46 recommendations suggested to reform the NSA by his hand-picked advisory committee. It is even worse that he rejected the compelling evidence from the independent Privacy and Civil Liberties Oversight Board which concluded that the NSA spying program is illegal and should be shut down at once.

Many Americans Oblivious to NSA Spy Scandal

Despite the fact that the Edward Snowden scandal and the theft of sensitive NSA intelligence made big news last year, many Americans are paying little attention to this travesty. I can offer no reason why many more Americans aren’t outraged at the fact that our own government is spying on us – ALL of us.

I could not find any polls showing what percentage of Americans are actually aware of what the NSA has been doing. However, there is new polling data that tells us just how few Americans are keeping up with the story and, in particular, how few are aware of President Obama’s NSA speech on Jan. 17. Take a look at the latest poll data from the Pew Research Center released last week.

If President Obama thought his NSA speech would convince the public that his changes were going to reign-in the NSA and protect our privacy, he was sorely mistaken. On the other hand, maybe he knew that the public is not paying much attention.

The new Pew Research Center poll shows not only that most Americans (50%) didn’t pay attention to the speech at all, but also that those who did, don't think Obama's proposals will change anything.

According to the poll, only 8% of Americans have “heard a lot” about Obama’s latest NSA proposals, while 41% have “heard a little.” If you only ask these two groups of people, 73% say Obama's changes will have no impact on protecting people’s privacy.

What this poll shows is that 91% of Americans know “a little” or “nothing” about the NSA changes President Obama outlined on January 17 when he said the spying operation will continue. This is so very sad!

There should be a broad-based public outrage over the NSA’s spying on Americans' phone records, e-mails, text messages, etc. While there is some outrage in the print media – including both conservatives and liberals – it is far from a broad-based public backlash.

Our only hope is that Congress, which has to approve some of Obama’s decisions on the NSA, will decide not to approve the latest suggested changes and better yet, will limit the NSA’s scope and depth of spying on us, or stop it altogether. That may be a longshot, unfortunately.

WEBINAR With Niemann Capital This Thursday

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If you are among the many investors today who are concerned about which direction the market may go in 2014, you need to join us this Thursday at 2:00 PM Eastern Time (11:00 AM Pacific). There is no charge for this event.

The presentation will last apprx. 30 minutes with plenty of time to ask any questions you may have. Just click on the button below to register for the event. I think you’ll be glad you did.

Best regards,                                                 

Gary D. Halbert

SPECIAL ARTICLES

NY Times: Watchdog Report Says N.S.A. Program Is Illegal and Should End

Privacy Board: NSA Telephone Records Program is Illegal (more details)

Obama’s NSA Blind Spot (Not really, he knows exactly what he’s doing)

 

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