Tag: Soviet Union

Soviet-Style Cybersecurity Regulation

Reading over the cybersecurity legislative package recently introduced in the Senate is like reading a Soviet planning document. One of its fundamental flaws, if passed, would be its centralizing and deadening effect on society’s responses to the many and varied problems that are poorly captured by the word “cybersecurity.”

But I’m most struck by how, at every turn, this bill strains to release cybersecurity regulators—and their regulated entities—from the bonds of law. The Department of Homeland Security could commandeer private infrastructure into its regulatory regime simply by naming it “covered critical infrastructure.” DHS and a panel of courtesan institutes and councils would develop the regulatory regime outside of ordinary administrative processes. And—worst, perhaps—regulated entities would be insulated from ordinary legal liability if they were in compliance with government dictates. Regulatory compliance could start to usurp protection of the public as a corporate priority.

The bill retains privacy-threatening information-sharing language that I critiqued in no uncertain terms last week (Title VII), though the language has changed. (I have yet to analyze what effect those changes have.)

The news for Kremlin Beltway-watchers, of course, is that the Department of Homeland Security has won the upper-hand in the turf battle. (That’s the upshot of Title III of the bill.) It’s been a clever gambit of Washington’s to make the debate which agency should handle cybersecurity, rather than asking what the government’s role is and what it can actually contribute. Is it a small consolation that it’s a civilian security agency that gets to oversee Internet security for us, and not the military? None-of-the-above would have been the best choice of all.

Ah, but the government has access to secret information that nobody else does, doesn’t it? Don’t be so sure. Secrecy is a claim to authority that I reject. Many swoon to secrecy, assuming the government has 1) special information that is 2) actually helpful. I interpret secrecy as a failure to put facts into evidence. My assumption is the one consistent with accountable government and constitutional liberty. But we’re doing Soviet-style cybersecurity here, so let’s proceed.

Title I is the part of the bill that Sovietizes cybersecurity. It brings a welter of government agencies, boards, and institutes together with private-sector owners of government-deemed “critical infrastructure” to do sector-by-sector “cyber risk assessments” and to produce “cybersecurity performance requirements.” Companies would be penalized if they failed to certify to the government annually that they have “developed and effectively implemented security measures sufficient to satisfy the risk-based security performance requirements.” Twenty-first century paperwork violations. But in exchange, critical infrastructure owners would be insulated from liability (sec. 105(e))—a neat corporatist trade-off.

How poorly tuned these security-by-committee processes are. In just 90 days, the bill requires a “top-level assessment” of “cybersecurity threats, vulnerabilities, risks, and probability of a catastrophic incident across all critical infrastructure sectors” in order to guide the allocation of resources. That’s going to produce risk assessment with all the quality of a student term paper written overnight.

Though central planning is not the way to do cybersecurity at all, a serious risk assessment would take at least a year and it would be treated explicitly in the bill as a “final agency action” for purposes of judicial review under the Administrative Procedure Act. The likelihood of court review and reversal is the only thing that might cause this risk assessment to actually use a sound methodology. As it is, watch for it to be a political document that rehashes tired cyberslogans and anecdotes.

The same administrative rigor should be applied to other regulatory actions created by the bill, such as designations of “covered critical infrastructure,” for example. Amazingly, the bill requires no administrative law regularity (i.e., notice-and-comment rulemaking, agency methodology and decisions subject to court review) when the government designates private businesses as “covered critical infrastructure” (sec. 103), but if an owner of private infrastructure wants to contest those decisions, it does require administrative niceties (sec. 103(c)). In other words, the government can commandeer private businesses at whim. Getting your business out of the government’s maw will require leaden processes.

Hopefully, our courts will recognize that a “final agency action” has occurred at least when the Department of Homeland Security subjects privately owned infrastructure to special regulation, if not when it devises whatever plan or methodology to do so.

The same administrative defects exist in the section establishing “risk-based cybersecurity performance requirements.” The bill calls for the DHS and its courtesans to come up with these regulations without reference to administrative process (sec. 104). That’s what they are, though: regulations. Calling them “performance requirements” doesn’t make a damn bit of difference. When it came time to applying these regulatory requirements to regulated entities (sec. 105), then the DHS would “promulgate regulations.”

I can’t know what the authors of the bill are trying to achieve by bifurcating the content of the regulations with the application of the regulations to the private sector, but it seems intended to insulate the regulations from administrative procedures. It’s like the government saying that the menu is going to be made up outside of law—just the force-feeding is subject to administrative procedure. Hopefully, that won’t wash in the courts either.

This matters not only because the rule of law is an important abstraction. Methodical risk analsysis and methodical application of the law will tend to limit what things are deemed “covered critical infrastructure” and what the regulations on that infrastrtucture are. It will limit the number of things that fall within the privacy-threatening information sharing portion of the bill, too.

Outside of regular order, cybersecurity will tend to be flailing, spasmodic, political, and threatening to privacy and liberty. We should not want a system of Soviet-style regulatory dictates for that reason—and because it is unlikley to produce better cybersecurity.

The better systems for discovering and responding to cybersecurity risks are already in place. One is the system of profit and loss that companies enjoy or suffer when they succeed or fail to secure their assets. Another is common law liability, where failure to prevent harms to others produces legal liability and damage awards.

The resistance to regular legal processes in this bill is part and parcel of the stampede to regulate in the name of cybersecurity. It’s a move toward centralized regulatory command-and-control over large swaths of the economy through “cybersecurity.”

Cry for Argentina

With Obamacare at the Supreme Court, the presidential primary debates in full swing, and the federal government’s continued unwillingness to liberate the economy and thus allow it to create jobs, it’s easy to forget that there’s a world outside America, one with its own economic issues and presidential elections.

Take Argentina, for example, a country near and dear to my heart ever since I studied abroad there nearly 15 years ago. A century ago, Argentina was emerging from oligarchic rule to an ever-liberalizing democracy that was one of the richest countries in the world. By 1930 it had the seventh-largest economy, outpacing fellow new-world ex-colonies like Canada and Australia and attracting waves of immigrants from Italy, Spain, and Eastern Europe. How did a country so rich in natural and human resources fall from that peak to become the butt of economists’ jokes?  (There are four types of countries in the world: developed, developing, Japan, and Argentina.)

The answer is the autarkic corporatism that came from the rule of Juan Domingo Peron, imposing an industrial policy that destroyed the burgeoning export-import sector, nationalized railroads, and gave unions all the power they wanted (so much that they even began clashing with Peron - sound familiar?). Combine that macroeconomic insanity—leading inevitably to social unrest and repressive government reactions thereto—with an idiosyncratic ”Third Way” foreign policy and redistributionist welfare schemes, and the jewel of Spain’s former empire came back to the pack of faltering Latin American states.

Wild populist swings of both the left and the right followed, interrupted only by a string of coup d’etats—I recall the syllabus of my Argentine history class read, “primer golpe de estado; segundo golpe de estado; tercer golpe de estado…”—resulting in a Dirty War between the ideological extremes that ended in the tone-deaf military triumvirate’s disastrous excursion in the Falkland Islands.  (Case in point: they thought President Reagan would support them over Thatcher’s Britain.) Democracy returned for good in 1983 but, save for a brief illusory period in the 1990s, Argentina’s economic house has never been in order. Recall that the country was a poster-child for hyperinflation in the late 1980s and even now inflation runs north of 20 percent (nobody knows for sure because the official figures cannot be trusted).

After an economic crisis of Great-Depression proportions (labeled simply La Crisis) in the early 2000s gave the country an extremely painful but long-needed correction—unpegging the peso from the U.S. dollar among other long-needed reforms—an accidental president from the south, Nestor Kirchner, began reimposing his brand of Peronism. This included defaulting on sovereign debt, government control of the energy sector, expanded social programs, and rapprochement with the likes of Venezuela’s Hugo Chavez. Deciding not to run for reelection, Kirchner handed the presidency to his wife, Cristina Fernandez de Kirchner, who essentially continued his heterodox policies while governing with an increasingly heavy hand against protestors and the media.

A few weeks ago, Argentines overwhelmingly reelected Fernandez, easily beating back opposition groups that never coalesced into a single movement or candidate. This result wasn’t surprising because the economy is expected to grow by eight percent this year and the middle class has largely recovered from the crisis—though most economists consider the current situation to be unsustainable, with the country eventually headed to a reckoning akin to the one it faced at the end of the ’90s (recall the tragic cycles the country endures).

Argentina provides America a “teachable moment,” to use one of our president’s favorite expressions. Like Argentina has been many times over the last century, the United States is at a crossroads. Will it continue to stand for individual liberty, innovation, and social mobility, or will Americans trade their freedom for ever-larger entitlements and evanescent protections from life’s vicissitudes? As Mary Anastasia O’Grady wrote in a column that we can only hope fails to be prophetic:

On this, the experience of Mrs. Kirchner’s Argentina is instructive. It abandoned free markets, ostensibly in the interest of social justice. The predictable result has been greater injustice, more poverty, and increasing concentration of wealth and power in the hands of the political class and its friends. Efforts to make the economy competitive have repeatedly been defeated even as the standard of living declined.

Argentina tests the theory that democracies have a built-in capacity to correct the overreach of government. Not only has it been unable to extricate itself from the black hole of corporatism, it is getting sucked in further.

Or, as Cristina Fernandez put it on the eve of her reelection, “I don’t know if Obama has read Peron, but let me tell you, it sure seems like it.”

[Not coincidentally to the timing of this blogpost, I will be in Argentina all next week, a working vacation of sorts.  I’m currently scheduled for two public talks: in Buenos Aires on Nov. 24 at 7pm at the business/economics university ESEADE on the topic of rule of law and economic development and in Tucuman on Nov.25 at 6pm at the Catalinas Park Hotel at a conference marking the 20th anniversary of the fall of Soviet communism, sponsored by the think tank Libertad y Progreso. Both events will be in Spanish.]

Eisenhower’s Lament

Spurred on by a new release of documents from the archives, the past few weeks have witnessed a renewed interest in the military-industrial complex (MIC), the term forever associated with Dwight David Eisenhower.

Or, at least, that should be the case. Eisenhower – the West Point graduate, career military officer, and hero of World War II – was one of the first to ever use the phrase, in a televised Farewell Address to the nation on January 17, 1961. Over the years, however, the MIC has become a mantra for progressives and left liberals, usually used in tandem with an assault on private enterprise, writ large, or as part of an elaborate conspiracy theory that equates crony capitalism with market economics. The left’s capture of the term has enabled too many on the right to dismiss it out of hand.

That is unfortunate. Dwight David Eisenhower was no liberal; far from it. And though the neoconservatives have attempted to expunge Ike from our collective memory, it is appropriate that his legacy is enjoying yet another revival. For what it’s worth, I’ll be doing my small part, at a half-day conference next month, and throughout 2011, to offer a perspective on the military-industrial complex that might appeal to devotees of limited, constitutional government.

This work will focus not just on Ike’s farewell address, but also on one of his first public addresses, the Chance for Peace Speech, delivered before the American Society of Newspaper Editors in April 1953. Taken together, the speeches highlight two of Eisenhower’s enduring concerns: opportunity costs, money spent on the military cannot be spent elsewhere; and the political and social costs of the United States becoming a garrison state, the creation of a permanent armaments industry, Ike feared, had already precipitated major changes in the nation’s economy, and threatened to change the nation itself.

Speaking in January 1961, during one of the darkest periods of the Cold War, Eisenhower viewed the MIC as a necessary evil. He viewed the threat posed by the Soviet Union and its sometime communist allies as sufficient justification for maintaining a large standing army, and a vast and technologically advanced Air Force and Navy. He also presided over a dramatic expansion of the nation’s nuclear arsenal, and realized (belatedly) that he had far too little control over those weapons and the men tasked with using them.

But I suspect that the permanence of the MIC would be most disturbing to President Eisenhower, were he with us now. Twenty years after the collapse of the Soviet Union, Americans today spend more on the military than at any time since World War II, and more than twice as much – in inflation-adjusted dollars – than when Ike left office. The general-president clearly failed to convince his fellow Americans of the need to limit the military’s growth. For all practical purposes, the MIC won.

Here’s hoping that many Americans will rediscover Eisenhower, and take heed of his warning, starting in 2011. They could start by supporting efforts to refocus our military on a few core objectives and reduce the Pentagon’s budget.

Travel after the Fall of the Iron Curtain

In the sumer of 1992, I lived and studied in Prague. I was keen on seeing life in Eastern Europe after the end of Soviet domination.

It was invigorating to think that my local law professor headed over the Vltava River in the afternoons to work on the new constitution in the Prague Castle. It was fascinating to learn of the “lustration” process by which participants in Soviet-era wrongs were penalized but not ostracized. Out of habit, no Czechs ever talked on the subway. Americans did.

There were other reminders of the old order. My overnight train to Katowice, Poland, from which I planned a connection to Krakow, stopped in the middle of nowhere. In the pitch black night, the sound of border guards throwing open train compartments and making demands in a foreign tongue brought forth fearsome movie-memories of life under totalitarianism.

They pulled a young man from my compartment and took him off the train. I don’t remember if it was a Central or South American passport, but it was one that doesn’t afford its bearer the luxury of easy international travel that Americans enjoy.

I honestly don’t remember if he was allowed back on the train. I’m just glad that era is over.

We Should Not Praise Stalin, But Bury Him

Although the debate has been raging for months, it has just come to my attention that the man responsible for the second-most number of murders ever – after Mao, of course, with Hitler a distant third – is to have his bust placed at the National D-Day Memorial in Bedford, Virginia.

Defenders of the Stalin bust argue that, whether we like it or not, our uneasy alliance with the Soviet Union during the war is a part of history and should be recognized. Furthermore, they say that his visage is in no way glorifying the man or his deeds.

This argument misses the point entirely. Memorials are monuments to fallen heroes, not historical dioramas. There is no statue of Stephen Douglas at the Lincoln Memorial, no bust of Wendell Willkie at the FDR Memorial, and no plaques honoring Axis dead at our WWII Memorial. Moreover – and perhaps most importantly from a historical perspective – Stalin had no role in D-Day; the invasion of Normandy by U.S., British, Canadian, Australian, Free French, and other Western forces.

While there is no question that Stalin, by virtue of commanding the army fighting on the Eastern Front, played an indispensable role in defeating Hitler, it should escape no one’s memory that he too was an evil, mass-murdering despot.

Stalin and communism should be universally reviled in the very same way as Hitler and Nazism. (Note also that Stalin only fought the Germans because Hitler invaded the USSR in violation of the Molotov-Ribbentrop Pact that divided Eastern Europe and enabled the Reich’s western incursions in the first place.)

Finally, no one doubts or discounts the bravery of the Russian and other Soviet soldiers fighting in defense of their homeland and families, far removed from the politics of terror that permeated their government – including my maternal grandfather, a tank captain who helped take Berlin. Accordingly, if we are to honor the Soviet role at our D-Day Memorial, we should honor the common Red Army soldiers – whom Stalin treated as disposable bullet-stoppers, many of whom he murdered after the war because they had witnessed the world beyond communism – not the tyrant and the murderous system they represented.

You can read about the collective amnesia – if not willful blindness – about the evils of communism that has set in among Western elites in Paul Hollander’s excellent Cato Development Policy Analysis.