Mood:  incredulous

________________________________________ From: The Daily Reckoning [mailto:dr@dailyreckoning.com] Sent: Thursday, February 16, 2012 12:37 PM 

Is a US-Iran War Inevitable? The Daily Reckoning U.S. Edition Home . Archives . Unsubscribe The Daily Reckoning | Thursday, February 16, 2012 • Doug Casey gives us his odds on an all-out military conflict with Iran, • What would be the consequences should war eventuate? And how do you prepare? • Plus, Bill Bonner on Facebook’s IPO, Mr. Government Fixer in Europe and plenty more...

 Checking in from Buenos Aires, Argentina... Joel Bowman We have in stall for you today, Fellow Reckoner, an interview with Mr. Douglas Casey. You’ll shortly discover that the topic, Iran and the possibility — says Doug, “probability” — of war with that sovereign nation, demands the discussion run a little longer than our usual feature piece. As such, our preamble will be correspondingly shorter than usual. Please enjoy Doug’s characteristically thought-provoking insights. Should you wish to opine on this important topic, feel free to direct your email to us here: joel@dailyreckoning.com. We will feature a selection of your emails in future reckonings. World oil production is about to be shaken to its core... You won’t believe which nation analysts at Wall Street’s biggest banks expect to become the world’s biggest energy producer by 2017 — or the effect it will have on America... our economy... our future... Click here to see who is set to become the new king of oil — and how you can use the news to go for big profits as early as this MAY! The Daily Reckoning Presents Is a US-Iran War Inevitable? An Interview with Doug Casey, conducted by Louis James Doug Casey US-Iranian saber-rattling or impending shoot-out? In his usual, candid manner, contrarian investor Doug Casey talks about why he believes it’s serious this time... why the US is the greatest threat to peace today... why Iran might move towards a gold standard... and what smart investors should do. L: Doug, I’ve heard you say you think the US is setting Iran up to be the next fall guy in the wag-the-dog show — do you think it could really come to open warfare? Doug: Yes, I do. It could just be saber rattling during an election year, but Western powers have been provoking Iran for years now — two decades, really. I just saw another report proclaiming that Iran is likely to attack the US, which is about as absurd as the allegations Bush made about Iraq bombing the US, when he fomented that invasion. It’s starting to look rather serious at this point, so I do think the odds favor actual fighting in the not-too-distant future. L: Could they really be so stupid? Doug: You know the answer to that one. We’re dealing with criminal personalities on both sides, and criminals are basically very stupid — meaning they have an unwitting tendency to self-destruction. One thing to remember is that most of those in power in the West still believe the old economic fallacy that war is good for the economy. L: The old broken-window fallacy. Paraphrasing Arlo Guthrie, it’s hard to believe anyone could get away with making a mistake that dumb for that long. Doug: People like those in power still suffer the delusion that it was World War II that ended the Great Depression for the US. Actually, it was only after the end of the war that the depression ended, in 1946. In his book World Economic Development: 1979 and Beyond, Herman Kahn documented long-term growth throughout the 20th century. Between 1914 to 1946 — a very tough time, with WWI, the Great Depression, and WWII — the world economy still grew at something like 1.8%. I believe real growth would have been several times as great, were it not for the state and its products. But people still believe that spending money on things that explode and kill and destroy is somehow good for the economy. L: I suppose they think it’s okay if it creates jobs here and destroys lives and livelihoods “over there.” But aside from the fact that it’s not safe to assume today’s enemies are not capable of bringing the battle onto US soil, it still ignores the fact that you’re spending money on stuff that gets destroyed — like broken windows — and that impoverishes us all. Worse, the cost is not just economic. Doug: That’s right. This coming war with Iran has the potential to turn into something resembling WWIII, with enormous consequences. Now, it’s hard to speak with any certainty on such matters, because most of what we have to go on are press reports. Governments keep most really critical facts on their doings to themselves, and what you read in the press is as likely as not just a warmed-over government press release — in other words, propaganda. Meaningless, if not actively deceptive. It is correctly said that in war, truth is the first casualty. L: But we do have the Internet these days, with indie reporters offering coverage ignored by the talking heads in the mainstream media. Doug: True; it doesn’t keep the chattering classes honest, but it does provide some diversity of spin, from which we can try to infer what’s really going on. And from all the various sources — mainstream and alternative, Western and from within the Muslim world — I have to say that it appears to me that the Iranians are not actually developing nuclear weapons. L: Then why do they act in such aggressive and bombastic ways? Doug: Western powers are pushing them around, telling them what they can and cannot do, and treating them like children or mental incompetents with no right of self-determination. How else would you expect them to react? They may have a collectivist theocratic regime, but it’s also a proud and ancient culture. Now, as you know, I don’t think there should be any countries at all — not in the sense of the modern nation-state, and I’m certainly no fan of the Tehran regime, but Iran is a sovereign state. The Iranians resent people from other countries assuming the right to tell them what they can and cannot do with their uranium enrichment program, just as people in the US would if Iranians told them what to do with... well, anything. L: Do you have specific data to substantiate your view that Iran is not focused on creating nuclear weapons? Doug: I was just reading about an official report that says that Iran is still not able to enrich uranium to the level needed to make nuclear weapons. Uranium occurs in two isotopes with half-lives long enough to make it possible to find reasonable amounts of them in the earth’s crust: U235 and U238. Most of it is U238 — 99.3% — but it’s the U235 that’s fissile, meaning, it’s the one you want for making nuclear reactors and weapons. So you have to enrich your uranium — to about 20%-30% U235 to make reactor fuel and 90% or better to make weapons. L: That’s why the Russians are able to sell “downblended” uranium from decommissioned nuclear weapons for use as reactor fuel. So, you’re saying the reports indicate that Iran is not capable of enriching uranium beyond the level needed for reactors? Doug: Yes. But again, I have to stress that reliable information is very hard to come by. Remember when the US accused Iraq of having a program to develop so-called weapons of mass destruction? Apart from the fact that, except for nuclear weapons, that term is a complete misnomer, they had no such thing. It was either lousy intelligence or outright fabrication — and I suspect the latter. So how can we trust what they tell us today? Only a fool would be so naïve. L: Indeed. Doug: In any event, why shouldn’t Iran have nuclear weapons? I wish none of these countries had them, but they do. No one stopped China, no one stopped North Korea, Pakistan, Israel, India, France, nor any of the others in the disreputable club that have them. L: Wasn’t it too late to intervene by the time those countries announced their nuclear capabilities? Doug: I don’t think so. Israel was friendly, so Western powers looked the other way. North Korea was too rabid, so they were left alone. The other countries are too big. The cat’s out of the bag at this point; any country can develop nuclear weapons, if it really wants to. But it’s easier and cheaper to bribe a general — or maybe just a supply sergeant — in India, Pakistan, or Russia to get what you want. Moreover, with the US on the rampage, prosecuting its counterproductive and unwinnable War on Terror, a lot of governments, especially ones unpopular in the West, have got to be thinking about acquiring nuclear capabilities. If Saddam had actually had nukes, the US would have left him alone, just as they’ve left the Kims to rot in the workers’ paradise they’ve made out of North Korea. It makes sense for a country stricken from the US’s official “nice” list and moved over to the “naughty” category to have some nukes. Everyone needs and wants a slingshot to keep the bully of the block at bay. If you oppose nuclear proliferation, your first target should be US foreign policy, which is the biggest impetus behind the scramble to arms. L: What about the argument that Iran would use nuclear weapons on Israel, if it had them? Doug: That’s ridiculous. It’s true that just one or two nukes would turn most of Israel to glass, but it’s a matter of mutually assured destruction (MAD), just as the détente between the US and USSR was. Israel is reported to have about 200 nuclear weapons, and the Iranians know it. Even if they launched a successful first strike against Israel, they would get wiped off the face of the earth in response. The regime in Iran is repressive and borderline lunatic, but they aren’t that stupid. No way are they going to attack Israel with nukes. They not only cannot, but should not, be singled out for exclusion from the nuclear club. L: But they’re part of the axis of evil, don’t you know? Doug: Speaking of evil, it’s evil to initiate the use of force or fraud. If Iran enriches uranium or even builds tools for war, that’s not evil per se. But using force to stop them from doing something that is not in itself wrong is wrong, and that would make Iran’s attackers the axis of evil. In my mind, the US is the biggest threat to peace in the world today. I can easily imagine those in power in the US starting a war over any silly pretext, real or imagined. It could easily happen by accident at this point. Things go wrong. Maybe some young hotheads in Iran’s Revolutionary Guard decide to take a boat out and attack a US frigate — launch a few RPGs at it before they’re blown out of the water. Then the US feels it needs to mete out some punishment and launches a strike against the base the boat came from — which would be attacking the Iranian mainland — and the thing spins completely out of control. Could happen at the drop of a hat. Maybe the commander of a US ship has a streak of General Jack D. Ripper from Kubrick’s Dr. Strangelove in him. Maybe the Russians or the Chinese — who are aiding the Iranians — mount a false-flag incident, because they want to see the US get involved in another tar baby. L: So... another case of not just doing the wrong thing, but the exact opposite of the right thing, with economic, political, and ultimately physical world consequences. Doug: That’s right. Just look at what they’re doing now, trying to isolate Iran from the world with an embargo. That could be seen as an act of war. L: Well, wait a minute. A blockade is regarded as an act of war, but if Western countries decide to harm their own economies by not trading with Iran, that’s unfriendly, but not force or fraud. Doug: Well, it would be forcing citizens in those Western countries to pay higher prices for things, denying them the choice of buying oil from Iran if they wanted to. But I agree; that’s more a matter of criminal tyranny and stupidity than an act of war. Still it sure is prodding Iran, throwing rocks at the hornets’ nest, as the US did with Japan before WWII. The Japanese basically have no domestic oil production and were getting their oil from the US and the Dutch East Indies. The US cut off both supplies, backing them into a corner, leaving them little choice but an aggressive response. At any rate, I think all of this could backfire on the US. Since the Iranians apparently can’t clear deposits through New York, where international dollar trades clear, they’ve made a very commonsense move to cut the US out of the middle and sell their oil directly to India, without using dollars. I think other countries will follow — and then what? Iran isn’t going to want bushels and bushels of rupiah or yen or whatever. I think the odds favor them turning to gold. It’s said that’s one of the means of payment the Indians will be using. Gold is the logical choice and the next step in the demise of the US dollar as the world’s reserve currency. There’s a lot of demand for the dollar to buy and sell oil. If countries stop using it, demand for the dollar would fall, at the very time the US is greatly increasing the supply of dollars. The day is coming when trillions of dollars outside the US will only be spendable inside the US. At that point it’s game over for the dollar. L: You’ve talked about the world going back onto a gold standard before. What do you say to the people who say that gold is a barbaric relic from the past that doesn’t work in a modern economy — they can’t go around with pockets full of doubloons to buy cars or chests full of treasure to buy houses... Doug: Such people are not thinking rationally and are economically ignorant. As always, we should start with a definition: what is money? The short answer is that it’s a store of wealth and medium of exchange. For reasons we’ve discussed and as Aristotle outlined over 2,000 years ago, gold is simply the best form of money ever adopted. And in our modern world, you don’t have to physically cart the stuff around. You can, but you can also transfer ownership of physical gold electronically, through services like GoldMoney.com. L: Note: We do endorse GoldMoney.com as a convenient and reliable way to own, trade, and transfer gold, but readers should be advised that Doug is an investor in it. Doug: Right. I like to put my money where my mouth is. L: Okay, so you see this trend being bullish for gold, clear enough. But most of the gold ever produced in the world still exists in purified form in various vaults around the planet. Gold doesn’t get used up like silver does, so there’s plenty of supply. So, would the physical need for gold as money really impact the price of gold and related equities, or would that be more a function of governments further debasing their currencies? Doug: Well, it’s estimated that there are some six billion ounces of refined gold in human possession around the world, or, somewhat less than one ounce per person. Global gold production is said to be about 80 million ounces a year, or about a 1.3% annual increase in the supply of gold. That would be the steady, “natural” rate of inflation if we were on a gold standard. The amount of various currency units in the world is increasing at a much, much faster pace than 1.3%. Nobody really knows, not even the Fed, but depending on how you define the money supply, it would take $10,000 to $50,000 — or more — per ounce to back all of the dollars in existence with gold. Whatever the correct number is, I expect gold’s price in dollars to increase dramatically as the world moves closer to and eventually adopts a gold standard. L: So, any investment implications beyond the obvious? Buy gold and silver for prudence and protection, buy gold stocks for speculative leverage? Doug: That’s the basic recipe. And diversify your holdings internationally. You can never tell when the government of your home country will have a psychotic break. L: What do you say to the people afraid that in a world so traumatized as to go back onto a gold standard, the risk of owning any paper asset, including gold stocks, would be too high? No one will trade gold stocks for a can of dog food in a Mad Max world... Doug: That’s a valid concern. You can’t eat paper, and even owning shares in a gold mine may not be of much use in a real economic cataclysm — the US government shut down gold mining during WWII as a nonessential industry. It could happen again. But that’s why, as you said, we own gold for prudence, and the stocks are strictly speculative vehicles. But let’s have some perspective. The security of your stock portfolio may become the least of your concerns if the US starts a war with Iran that touches off WWIII. If that happens, the US government and population will both turn hysterical, and the whole country will be locked down like a prison. What was once America will become even more of a police state than it is now. Who knows where that would end? So, one of the most intelligent things you can do is as I’ve been saying for years: diversify your assets and your physical presence internationally. Having some place you like to spend time off the beaten track, where you can ride the storm out, should be top priority for everyone who can afford it. Preparing for the worst at home should be top priority for those who can’t. L: Would you care to put odds on open war between the US and Iran? Doug: I’d say it’s highly probable within the next two to four years — say, between 50% and 75% — that an actual shooting war will break out. L: Not much time to prepare. I sure hope all our readers are doing what they can. Doug: Me too. L: Right then. Thanks for your thoughts and guidance, Doug. Doug: You’re welcome. We’ll talk again soon. P.S. To get an even better sense of how badly a US-Iran war could hurt the American economy, readers can view our free report here. It’s the first step to take to prepare yourself and your investments for what lies ahead. Regards, Doug Casey and Louis James, for The Daily Reckoning Joel’s Note: Predictions vary widely on where the price of oil might go should (another) war break out in the Gulf. We’ve seen forecasts of $300 per barrel batted about, which doesn’t feel like a huge stretch to us. Iran contributes significantly more to current global supply than did Iraq before it, and few doubt that a strangulation of the all-important Strait of Hormuz would rocket prices higher...wherever “higher” might be. Needless to say, this further underscores the need for energy independence at home. And Byron King, Agora’s resident geologist, reckons he’s found out how to make that a reality. He reveals all in his “Re-made in America” presentation. Give it a look here. Now here is a stimulus plan that CAN work Ordinary people all across the nation have quietly started rebuilding their wealth — and returning their life to normal — with a very unusual and unexpected stimulus plan of their own... A flurry of new jobs... $75,000-a-year salaries... explosive growth in personal bank accounts... cash payments of up to $35,000 a month — people from all walks of life are starting to cash in on it in one way or another. Click here now to get full details on what is happening and how YOU can be one of the people who profits from it too. Bill Bonner A Greek Debt Crisis Recap Bill Bonner Reckoning from Rancho Santana, Nicaragua... The Dow down 97 points yesterday. And the Greek story nears its conclusion... The Germans agree to bail out the country...at least for a while... ..and the Greeks agree to act more like Germans...at least while everyone is looking... But now everybody agrees that the farce has gone on long enough. Let’s recap: The big banks lent the Greeks money. Then, the bankers paid themselves big bonuses, rewards for having booked so much business. The Greeks spent it like they stole it...which they practically did. With the help of Goldman Sachs, they rigged their accounts so as to appear to be better credit risks than they really were. Then, of course, the Greeks could not repay. Since they gained independence from the Ottoman Turks in 1828, the Greeks never, ever repaid a loan as promised. Instead, they were in default about half the time. But rather than let Mr. Market sort it out...as he had every other time, Mr. Government Fixer stepped in. He promised to manage the situation so that the careless lenders wouldn’t have to take the losses they deserved. How? By lending the borrower more money! So, the Greeks were given more money...and told to straighten up. And the Greeks made an effort. Rather than spend money as freely as before, they cut back. Thousands of government employees were laid off, budgets trimmed...belts tightened. This, naturally, led to an economic slump. GDP fell at a 5% rate in the 3rd quarter of last year. In the 4th quarter it was falling even faster, at a 7% annual rate. The New York Times reports: By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. ... The situation at the macro level is, if anything, even more transformational. The Chinese have largely taken over Piraeus, Greece’s main port, with an eye to make it a conduit for shipping goods into Europe. ... The latest austerity plan meant to satisfy Greece’s creditors and allow for new infusions of financial aid may have averted involuntary default — and a global economic downturn — but will nonetheless make life for ordinary Greeks even more difficult. The plan reduces the minimum wage by more than 20 percent, mandates thousands of layoffs and reduces some pensions, probably ensuring that strikes and demonstrations will continue to be a feature of the Greek landscape. As in Argentina 10 years ago, the Greek middle class is being hit hard. The upper classes are protected. They own stocks. They have bank accounts in foreign countries. And the lower classes had nothing before the crisis. They haven’t lost a penny. But the middle classes lose jobs, income...and benefits. That is what is happening in America too. Middle class wealth, built up between 1980 and 2007, was largely an illusion. It was money borrowed from the future... Now, it must be paid back. And there’s not much Mr. Government Fixer can do about it. The problem is too much debt. Adding more debt doesn’t help. And more thoughts... “But Bill, aren’t you being a little simplistic,” asks a Dear Reader. “The idea is not to add debt for its own sake. The idea is just to try to mediate the social consequences of private sector de- leveraging while giving the economy time to get back on its feet. Why won’t that work?” Why won’t it work? We repeat the question to give us time to think... ..oh yes...it won’t work because it ignores the reason the economy was knocked on its derriere in the first place. If the cause of the setback had been interest rates that were too high...or a natural disaster...the strategy might work. Just as an ancient Pharaoh made Bible fame by saving grain in the fat years and then releasing it when the harvests failed, so might a sage government today draw on its own surpluses to help soften the blow of a bad winter or an earthquake. But the government has no surpluses. Only deficits. And you can’t mitigate the damage of an earthquake by setting off a nuclear explosion. Neither can you solve the problem of too much debt by adding to it. When an economy has too much debt, there’s only one solution. Debt delenda est. Debt must be eliminated. It can be done in the old fashioned way — by Mr. Market. Or it can be done by Mr. Government Fixer. Mr. Market will do it quickly...efficiently...and brutally. Mr. Government Fixer will hesitate...equivocate...vacillate...prevaricate...and generally fornicate everything up. He will protect the guilty insiders...at the expense of the innocent taxpayers and general public. And in the end, he will let the debtor default, too, for he will have no other choice. *** We warned you about buying Facebook. Here, another colleague, Dan Ferris, elaborates: Buying the Facebook IPO at its rumored valuation level would be a big mistake. Buying the other social networking companies at current valuations is also a mistake. Dan thinks the whole market has been infected by a bullishness. If you’re eating, sleeping, and breathing in lots of news, it’s virtually impossible not to get infected. For example, check out the American Association of Individual Investors Sentiment Survey. Every week, they ask investors if they’re bullish, neutral, or bearish on stocks for the next six months. In the most recent survey 43.l8% of those surveyed were bullish...and just 25.1% were bearish. (The average level of bullishness is 39% and the average bearish reading is 31%, so the latest survey is showing extreme bullishness.) Dan thinks that investors — most of them — routinely buy the wrong investments at the wrong time: A famous study shows how investors ruin their results by letting the market’s ups and downs rule their decisions. Market research firm Dalbar runs an ongoing study comparing stock market returns (the S&P Index) with real investors’ returns. As of the 20-year period ended December 31, 2010, stocks returned 9.14% per year, on average, but investors earned just 3.27% per year during the period.” Investors got slighted because they got scared at the bottom and sold, and bought back in only after a rising market fueled their confidence. Plenty of professionals make money following the market’s trends, but their methods are highly technical and unemotional. That’s the opposite of the hysteria that sinks so many investors. Getting caught up in bullishness gives many investors another reason to fool themselves in thinking they are smarter than they really are. Regards, Bill Bonner, for The Daily Reckoning ---------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com Where to Wait Out the Great Correction How Warren Buffett Looks at Stocks vs. Gold Investing How to Ruin Your Economy and Influence People Greece Negotiations Drag On Eurozone Economy Contracts Making Sense of Rising US Gas Prices ________________________________________ The Daily Reckoning: Now in its 11th year, The Daily Reckoning is the flagship e-letter of Baltimore-based financial research firm and publishing group Agora Financial, a subsidiary of Agora Inc. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Published daily in six countries and three languages, each issue delivers a feature-length article by a senior member of our team and a guest essay from one of many leading thinkers and nationally acclaimed columnists. Cast of Characters: Bill Bonner Founder Addison Wiggin Publisher Eric Fry Editorial Director Joel Bowman Managing Editor The Mogambo Guru Editor Rocky Vega Editor ________________________________________ Additional articles and commentary from The Daily Reckoning on: Twitter Facebook DR iPhone APP To end your Daily Reckoning e-mail subscription and associated external offers sent from Daily Reckoning, cancel your free subscription. If you are you having trouble receiving your Daily Reckoning subscription, you can ensure its arrival in your mailbox by whitelisting the Daily Reckoning. © 2010-2012 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Nothing in this e-mail should be considered personalized investment advice. A lthough our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation.Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Posted by Joe Anybody at 12:01 AM PST

Updated: Thursday, 16 February 2012 2:33 PM PST

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In addition, Lionsgate will be making a financial donation to Covenant House for every share of the GOOD DEEDS trailer! So make sure to watch and share the video!

http://youtu.be/pwcmBBnh4vo

Posted by Joe Anybody at 7:23 AM PST

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1. [1] http://www.chomsky.info/letters/19900301.htm
2. [2] http://www.huffingtonpost.com/robert-naiman/uk-poll-consistent-with-1_b_64475.html
3. [3] http://www.fair.org/index.php?page=3321
4. [4] http://www.iraqbodycount.org
5. [5] http://www.commondreams.org/headlines/072100-03.htm
6. [6] http://news.bbc.co.uk/2/hi/middle_east/642189.stm
7. [7] http://www.news.cornell.edu/chronicle/99/9.30.99/Halliday_talk.html
8. [8] http://www.youtube.com/watch?v=FbIX1CP9qr4
9. [9] http://www.defense.gov/news/newsarticle.aspx?id=66515
10. [10] http://creativecommons.org/licenses/by-nc-nd/3.0

Posted by Joe Anybody at 12:04 PM PST

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 TWITTER TIPS FROM JOE

http://www.joe-anybody.com/id143.html

Posted by Joe Anybody at 3:49 PM PST

Updated: Sunday, 29 January 2012 3:51 PM PST

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Wednesday, January 11, 2012

America’s Longest Ongoing War: The ‘Race’ War on Drugs

http://www.activistpost.com/2012/01/americas-longest-ongoing-war-race-war.html

"The drug war is not to protect the children, save the babies, shield the neighborhoods, or preserve the rain forests. The drug war is a violent campaign against black men and by extension the black family, among many others." ~ Wilton D. Alston, "How Can Anyone Not Realize the War on (Some) Drugs Is Racist?" LewRockwell.com (June 24, 2011)

NORML image

John W. Whitehead
Lew Rockwell

After more than 40 years and at least $1 trillion, America’s so-called "war on drugs" ranks as the longest-running, most expensive and least effective war effort by the American government. Four decades after Richard Nixon declared that "America’s public enemy No. 1 in the United States is drug abuse," drug use continues unabated, the prison population has increased six fold to over two million inmates (half a million of whom are there for nonviolent drug offenses), SWAT team raids for minor drug offenses have become more common, and in the process, billions of tax dollars have been squandered.

Just consider – every 19 seconds, someone in the U.S. is arrested for violating a drug law. Every 30 seconds, someone in the U.S. is arrested for violating a marijuana law, making it the fourth most common cause of arrest in the United States. Approximately 1,313,673 individuals were arrested for drug-related offenses in 2011. Police arrested an estimated 858,408 persons for marijuana violations in 2009. Of those charged with marijuana violations, approximately 89 percent were charged with possession only. Since 1971, more than 40 million individuals have been arrested due to drug-related offenses. Moreover, since December 31, 1995, the U.S. prison population has grown an average of 43,266 inmates per year, with about 25 percent sentenced for drug law violations.

The foot soldiers in the government’s increasingly fanatical war on drugs, particularly marijuana, are state and local police officers dressed in SWAT gear and armed to the hilt. These SWAT teams carry out roughly 50,000 no-knock raids every year in search of illegal drugs and drug paraphernalia. As author and journalist Radley Balko reports, "The vast majority of these raids are to serve routine drug warrants, many times for crimes no more serious than possession of marijuana... Police have broken down doors, screamed obscenities, and held innocent people at gunpoint only to discover that what they thought were marijuana plants were really sunflowers, hibiscus, ragweed, tomatoes, or elderberry bushes. (It’s happened with all five.)"

No wonder America’s war on drugs has increasingly become an issue of concern on and off the campaign trail. Back in 1976, Jimmy Carter campaigned for president on a platform that included decriminalizing marijuana and ending federal criminal penalties for possession of up to one ounce of the drug. Thirty-six years later, the topic is once again up for debate, especially among Republican presidential contenders whose stances vary widely, from Ron Paul who has called for an end to the drug war, to Govs. Rick Perry and Jon Huntsman who have said that states should be allowed to legalize medical marijuana without federal interference, to Rick Santorum who has admitted to using marijuana while in college but remains adamantly opposed to its legalization.

Americans are showing themselves to be increasingly receptive to a change in the nation’s drug policy, with a Gallup poll showing a record-high 50% of Americans favoring legalizing marijuana use, nearly half of all Americans favor legalizing the possession of small amounts of marijuana for personal use, 70% favoring legalizing it for medical purposes, and a 2008 Zogby poll which found that three in four Americans believe the war on drugs to be a failure. "As an active duty jail superintendent, I've seen how the drug war doesn't do anything to reduce drug abuse but does cause a host of other problems, from prison overcrowding to a violent black market controlled by gangs and cartels," said Richard Van Wickler, the serving corrections superintendent in Cheshire County, N.H. "For a long time this issue has been treated like a third rail by politicians, but polls now show that voters overwhelmingly agree that the drug war is a failure and that a new direction is sorely needed."

A growing number of law enforcement officials and national organizations are also calling for an end to the drug wars, including the US Conference of Mayors, the Global Commission on Drug Policy, which includes former UN Secretary General Kofi Annan, former US Secretary of State George Schultz, and former presidents of Mexico, Colombia, and Brazil, and the NAACP. In fact, at their national convention in July 2011, the NAACP voiced their concern over the striking disparity in incarceration between whites and blacks, particularly when it comes to drug-related offenses.

In terms of its racial impact, the U.S. government’s war on drugs also constitutes one of the most racially discriminatory policies being pushed by the government in recent decades, with African-Americans constituting its greatest casualties. As the ACLU has reported, "Despite the fact that whites engage in drug offenses at a higher rate than African-Americans, African-Americans are incarcerated for drug offenses at a rate that is 10 times greater than that of whites." Indeed, blacks – who make up 13% of the population – account for 40% of federal prisoners and 45% of state prisoners convicted of drug offenses.

Moreover, a November 2011 study by researchers at Duke University found that young blacks are arrested for drug crimes ten times more often than whites. Likewise, a 2008 study by the ACLU concluded that blacks in New York City were five times more likely to be arrested than their white counterparts for simple marijuana possession. Latinos were three times more likely to be arrested. The Drug Policy Alliance and California NAACP released a report claiming that between 2006 and 2008 "police in 25 of California's major cities arrested blacks at four, five, six, seven, and even 12 times the rate of whites."

This disproportionate approach to prosecuting those found in possession of marijuana is particularly evident in California, where black marijuana offenders were imprisoned 13 times as much as non-blacks in 2011. In fact, between 1990 and 2010, there was a 300% surge in arrests for marijuana possession for nonwhites. As the Center on Juvenile and Criminal Justice concluded, "California’s criminal justice system can be divided into two categories with respect to marijuana: one system for African-Americans, another for all other races."

Thus, while the government’s war on drugs itself may not be an explicit attempt to subjugate minority groups, the policy has a racist effect in that it disproportionately impacts minority communities. Moreover, the origins of drug prohibition have explicitly racial justifications. In the late 19th and early 20th centuries, prohibitionists clamoring to make drugs illegal tapped into common racial prejudices to convince others of the benefits of drug prohibition. For example, opium imports to America peaked in the 1840s, with 70,000 pounds imported annually, but Chinese immigrants did not arrive in large numbers until after the 1850s. Thus, Americans were using opium in copious amounts before Chinese immigrants arrived. Once they arrived however, they became convenient scapegoats for those interested in making opium illegal. Prohibitionists portrayed opium smoking as a habit below the respectability of "white" men. In a similar manner, marijuana was later associated with blacks, Latinos, and jazz culture, making marijuana an easy target for prohibition.

Yet despite 40 years of military funding to eradicate foreign drug supplies, increased incarceration rates, and more aggressive narcotics policing, the war on drugs has done nothing to resolve the issue of drug addiction. Consumption of cocaine and marijuana has been relatively stable over the past four decades, with a spike in use during the 1970s and 80s. And a European Union Commission study determined that "global drug production and use remained largely unchanged from 1998 through 2007." In fact, the only things that have changed are that drugs are cheaper and more potent, there are more people in prison, and the government is spending more taxpayer money.

So what’s the solution?

As Professor John McWhorter contends, problems of addiction should be treated like the medical problems they are – in other words, drug addiction is a health problem, not a police problem. At the very least, marijuana, which has been widely recognized as medically beneficial, should be legalized. As a society, we would be far better off investing the copious amounts of money currently spent on law enforcement in prevention and treatment programs. Of course, the pharmaceutical industry doesn’t want marijuana legalized, fearing it might cut into its profit margins. However, as California has shown, it could be a boon for struggling state economies. Marijuana is California’s biggest cash crop, responsible for $14 billion a year in sales. Were California to legalize the drug (it legalized medical marijuana in 1996) and allow the state to regulate and tax its sale, tax collectors estimate it could bring in $1.3 billion in revenue. Prior to the Obama administration’s crackdown on the state’s medical marijuana dispensaries, which has cost the state thousands of jobs, lost income and lost tax revenue, California had been raking in $100 million in taxes from the dispensaries alone.

As Neill Franklin, the executive director of Law Enforcement Against Prohibition who worked on narcotics policing for the Maryland State Police and Baltimore Police Department for over 30 years, remarked in the New York Times:

In an earlier era it may have been a smart move for politicians to act "tough on drugs" and stay far away from legalization. But today, many voters recognize that our prohibition laws don’t do anything to reduce drug use but do create a black market where cartels and gangs use violence to protect their profits.

While some fear that legalization would lead to increased use, those who want to use marijuana are probably already doing so under our ineffective prohibition laws. And when we stop wasting so many resources on locking people up, perhaps we can fund real public education and health efforts of the sort that have led to dramatic reductions in tobacco use over the last few decades – all without having to put handcuffs on anyone.

I have spent my entire adult life fighting the war on drugs as a police officer on the front lines. I have experienced the loss of friends and comrades who fought this war alongside me, and every year tens of thousands of other people are murdered by gangs battling over drug turf in American cities, Canada and Mexico. It is time to reduce violence by taking away a vital funding source from organized crime just as we did by ending alcohol prohibition almost 80 years ago.

The goals of reducing crime, disease, death and addiction have not been met by the "drug war" that was declared by President Nixon 40 years ago and ramped up by each president since.

The public has waked up to the fact that we need to change our marijuana laws. Savvy politicians would do well to catch up.

http://www.activistpost.com/2012/01/americas-longest-ongoing-war-race-war.html

Constitutional attorney and author John W. Whitehead [send him mail] is founder and president of The Rutherford Institute. He is the author of The Change Manifesto (Sourcebooks).

Posted by Joe Anybody at 11:44 AM PST

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Mood:  flirty

Secure Passwords Keep You Safer

By Bruce Schneier
Wired News
January 15, 2007

http://www.schneier.com/essay-148.html

Ever since I wrote about the 34,000 MySpace passwords I analyzed, people have been asking how to choose secure passwords.

My piece aside, there's been a lot written on this topic over the years -- both serious and humorous -- but most of it seems to be based on anecdotal suggestions rather than actual analytic evidence. What follows is some serious advice.

The attack I'm evaluating against is an offline password-guessing attack. This attack assumes that the attacker either has a copy of your encrypted document, or a server's encrypted password file, and can try passwords as fast as he can. There are instances where this attack doesn't make sense. ATM cards, for example, are secure even though they only have a four-digit PIN, because you can't do offline password guessing. And the police are more likely to get a warrant for your Hotmail account than to bother trying to crack your e-mail password. Your encryption program's key-escrow system is almost certainly more vulnerable than your password, as is any "secret question" you've set up in case you forget your password.

Offline password guessers have gotten both fast and smart. AccessData sells Password Recovery Toolkit, or PRTK. Depending on the software it's attacking, PRTK can test up to hundreds of thousands of passwords per second, and it tests more common passwords sooner than obscure ones.

So the security of your password depends on two things: any details of the software that slow down password guessing, and in what order programs like PRTK guess different passwords.

Some software includes routines deliberately designed to slow down password guessing. Good encryption software doesn't use your password as the encryption key; there's a process that converts your password into the encryption key. And the software can make this process as slow as it wants.

The results are all over the map. Microsoft Office, for example, has a simple password-to-key conversion, so PRTK can test 350,000 Microsoft Word passwords per second on a 3-GHz Pentium 4, which is a reasonably current benchmark computer. WinZip used to be even worse -- well over a million guesses per second for version 7.0 -- but with version 9.0, the cryptosystem's ramp-up function has been substantially increased: PRTK can only test 900 passwords per second. PGP also makes things deliberately hard for programs like PRTK, also only allowing about 900 guesses per second.

When attacking programs with deliberately slow ramp-ups, it's important to make every guess count. A simple six-character lowercase exhaustive character attack, "aaaaaa" through "zzzzzz," has more than 308 million combinations. And it's generally unproductive, because the program spends most of its time testing improbable passwords like "pqzrwj."

According to Eric Thompson of AccessData, a typical password consists of a root plus an appendage. A root isn't necessarily a dictionary word, but it's something pronounceable. An appendage is either a suffix (90 percent of the time) or a prefix (10 percent of the time).

So the first attack PRTK performs is to test a dictionary of about 1,000 common passwords, things like "letmein," "password1," "123456" and so on. Then it tests them each with about 100 common suffix appendages: "1," "4u," "69," "abc," "!" and so on. Believe it or not, it recovers about 24 percent of all passwords with these 100,000 combinations.

Then, PRTK goes through a series of increasingly complex root dictionaries and appendage dictionaries. The root dictionaries include:

• Common word dictionary: 5,000 entries
• Names dictionary: 10,000 entries
• Comprehensive dictionary: 100,000 entries
• Phonetic pattern dictionary: 1/10,000 of an exhaustive character search

The phonetic pattern dictionary is interesting. It's not really a dictionary; it's a Markov-chain routine that generates pronounceable English-language strings of a given length. For example, PRTK can generate and test a dictionary of very pronounceable six-character strings, or just-barely pronounceable seven-character strings. They're working on generation routines for other languages.

PRTK also runs a four-character-string exhaustive search. It runs the dictionaries with lowercase (the most common), initial uppercase (the second most common), all uppercase and final uppercase. It runs the dictionaries with common substitutions: "$" for "s," "@" for "a," "1" for "l" and so on. Anything that's "leet speak" is included here, like "3" for "e."

The appendage dictionaries include things like:

• All two-digit combinations
• All dates from 1900 to 2006
• All three-digit combinations
• All single symbols
• All single digit, plus single symbol
• All two-symbol combinations

AccessData's secret sauce is the order in which it runs the various root and appendage dictionary combinations. The company's research indicates that the password sweet spot is a seven- to nine-character root plus a common appendage, and that it's much more likely for someone to choose a hard-to-guess root than an uncommon appendage.

Normally, PRTK runs on a network of computers. Password guessing is a trivially distributable task, and it can easily run in the background. A large organization like the Secret Service can easily have hundreds of computers chugging away at someone's password. A company called Tableau is building a specialized FPGA hardware add-on to speed up PRTK for slow programs like PGP and WinZip: roughly a 150- to 300-times performance increase.

How good is all of this? Eric Thompson estimates that with a couple of weeks' to a month's worth of time, his software breaks 55 percent to 65 percent of all passwords. (This depends, of course, very heavily on the application.) Those results are good, but not great.

But that assumes no biographical data. Whenever it can, AccessData collects whatever personal information it can on the subject before beginning. If it can see other passwords, it can make guesses about what types of passwords the subject uses. How big a root is used? What kind of root? Does he put appendages at the end or the beginning? Does he use substitutions? ZIP codes are common appendages, so those go into the file. So do addresses, names from the address book, other passwords and any other personal information. This data ups PRTK's success rate a bit, but more importantly it reduces the time from weeks to days or even hours.

So if you want your password to be hard to guess, you should choose something not on any of the root or appendage lists. You should mix upper and lowercase in the middle of your root. You should add numbers and symbols in the middle of your root, not as common substitutions. Or drop your appendage in the middle of your root. Or use two roots with an appendage in the middle.

Even something lower down on PRTK's dictionary list -- the seven-character phonetic pattern dictionary -- together with an uncommon appendage, is not going to be guessed. Neither is a password made up of the first letters of a sentence, especially if you throw numbers and symbols in the mix. And yes, these passwords are going to be hard to remember, which is why you should use a program like the free and open-source Password Safe to store them all in. (PRTK can test only 900 Password Safe 3.0 passwords per second.)

Even so, none of this might actually matter. AccessData sells another program, Forensic Toolkit, that, among other things, scans a hard drive for every printable character string. It looks in documents, in the Registry, in e-mail, in swap files, in deleted space on the hard drive ... everywhere. And it creates a dictionary from that, and feeds it into PRTK.

And PRTK breaks more than 50 percent of passwords from this dictionary alone.

What's happening is that the Windows operating system's memory management leaves data all over the place in the normal course of operations. You'll type your password into a program, and it gets stored in memory somewhere. Windows swaps the page out to disk, and it becomes the tail end of some file. It gets moved to some far out portion of your hard drive, and there it'll sit forever. Linux and Mac OS aren't any better in this regard.

I should point out that none of this has anything to do with the encryption algorithm or the key length. A weak 40-bit algorithm doesn't make this attack easier, and a strong 256-bit algorithm doesn't make it harder. These attacks simulate the process of the user entering the password into the computer, so the size of the resultant key is never an issue.

For years, I have said that the easiest way to break a cryptographic product is almost never by breaking the algorithm, that almost invariably there is a programming error that allows you to bypass the mathematics and break the product. A similar thing is going on here. The easiest way to guess a password isn't to guess it at all, but to exploit the inherent insecurity in the underlying operating system.

Posted by Joe Anybody at 11:38 PM PST

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Mood:  special

A Christmas Story: Zen Style

Posted by Joe Anybody at 1:48 PM PST

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