201712

December 7, 2017 4:55PM

Hayden, NSA and the Road to 9/11

This article originally appeared on Just Security on December 7, 2017

 


divRetired Gen. Michael Hayden, former director of the NSA and CIA (and now, a national security analyst at CNN), has recently emerged as a leading critic of the Trump administration, but not so long ago, he was widely criticized for his role in the post-9/11 surveillance abuses. With the publication of his memoir, Playing to the Edge: American Intelligence in the Age of TerrorHayden launched his reputational rehab campaign.

Like most such memoirs by high-level Washington insiders, Hayden’s tends to be heavy on self-justification and light on genuine introspection and accountability. Also, when a memoir is written by someone who spent their professional life in the classified world of the American Intelligence Community, an additional caveat is in order: The claims made by the author are often impossible for the lay reader to verify. This is certainly the case for Playing to The Edge, an account of Hayden’s time as director of the NSA, and subsequently, the CIA.

Fortunately, with respect to at least one episode Hayden describes, litigation I initiated under the Freedom of Information Act (FOIA) has produced documentary evidence of Hayden’s role in the 9/11 intelligence failure and subsequent civil liberties violations. The consequences of Hayden’s misconduct during this time continue to be felt today. First, some background. 

The War Inside NSA, 1996 to 2001

By the mid-1990s, a group of analysts, cryptographers, and computer specialists at NSA realized that the growing volume of digital data on global communications circuits was both a potential gold mine of information on drug traffickers and terrorist organizations, as well as a problem for NSA’s largely analog signals intelligence (SIGINT) collection, processing, and dissemination systems. As recounted in the documentary A Good American, three NSA veterans—Bill Binney, Ed Loomis, and Kirk Wiebe—set out to solve the problem of handling an ever-increasing stream of digital data while protecting the 4th Amendment rights of Americans against warrantless searches and seizures.

Through their Signals Intelligence Automation Research Center (SARC), they had, by 1999, developed a working prototype system, nicknamed THINTHREAD. A senior Republican House Permanent Select Committee on Intelligence (HPSCI) staffer, Diane Roark, was so impressed with what Binney, Loomis, and Wiebe had developed, that she helped steer approximately $3 million to the THINTHREAD project to further its development. But by April 2000, Roark and the SARC team had run into the ultimate bureaucratic roadblock for their plan: Hayden, who had recently been installed as NSA director.

He had his own, preferred solution to the same problem the SARC team had been trying to solve. As Hayden noted in his memoir:

Our answer was Trailblazer. This much-maligned (not altogether unfairly) effort was more a venture capital fund than a single program, with our investing in a variety of initiatives across a whole host of needs. What we wanted was an architecture that was common across our mission elements, interoperable, and expandable. It was about ingesting signals, identifying and sorting them, storing what was important, and then quickly retrieving data in response to queries.

It was, of course, a description that fit THINTHREAD perfectly—except for the collection and storage of terabytes of digital junk. THINTHREAD’s focus on metadata mining and link analysis was designed to help analysts pinpoint the truly important leads to follow while discarding irrelevant data. Hayden’s concept mirrored that of his successor, Keith Alexander, who also had a “collect it all” mentality.

In his memoir, Hayden spoke of the need to “engage industry” (p. 20) in the effort to help NSA conquer the challenge of sorting through the mind-numbing quantity of digital data, but even Hayden admitted that “When we went to them for things nobody had done yet, we found that at best they weren’t much better or faster than we were” (page 20).

That should’ve been Hayden’s clue that NSA would be better off pursuing full deployment of THINTHREAD, a proven capability. But Hayden chose to pursue his industry-centric approach instead, and he tolerated no opposition or second-guessing of the decision he’d made.

In April 2000, Hayden’s message to the NSA workforce made it clear that any NSA employees who went to Congress to suggest a better way for the NSA to do business would face his wrath. Even so, the THINTHREAD team pressed on, managing to get their system deployed to at least one NSA site in a test bed status, working against a real-world target. Meanwhile, Roark continued to push NSA to make the program fully operational, but Hayden refused, and just three weeks before Sept. 11, 2001, further development of THINTHREAD was terminated in favor of the still hypothetical TRAILBLAZER program.

DoD IG Investigation vs. Hayden’s memoir

As Loomis noted in his own account of the THINTHREAD-TRAILBLAZER saga, within days after the 9/11 attacks, NSA management ordered key components of THINTHREAD—the system Hayden had rejected—to be integrated (without the inclusion of 4th Amendment compliance software) into what would become known as the STELLAR WIND warrantless surveillance program. Terrified that the technology they’d originally developed to fight foreign threats was being turned on the American people, Loomis, Binney, and Wiebe retired from the NSA at the end of October 2001.

Over the next several months, they would attempt to get the Congressional Joint Inquiry to listen to their story, but to no avail. By September 2002, the trio of retired NSA employees, along with Roark, decided to file a Defense Department Inspector General (DoD IG) hotline complaint, in which they alleged waste, fraud, and abuse in the TRAILBLAZER program. Inside NSA, they still had an ally—a senior executive service manager named Tom Drake, who had become responsible for the remnants of THINTHREAD after the SARC team had resigned. Drake became the key source for the subsequent DoD IG investigation, which resulted in a scathing, classified report completed in December 2004.

The TRAILBLAZER-THINTHREAD controversy subsequently surfaced in the press, and I followed the reporting on it while working as a senior staffer for then-Representative Rush Holt (D-N.J.), a HPSCI member at the time. Once Holt was appointed to the National Commission on Research and Development in the Intelligence Community, I asked for and received copies of the published DoD IG reports dealing with the THINTHREAD and TRAILBLAZER programs.

The 2004 report remains the most damning IG report I’ve ever read, and after Holt announced his departure from Congress in 2014, I decided to continue my own investigation into this episode as an analyst at the Cato Institute. In March 2015, I filed a FOIA request seeking not only the original 2004 DoD IG report, but all other documents relevant to the investigation.

After being stonewalled by DoD and NSA for nearly two years, Cato retained the services of Loevy and Loevy of Chicago to prosecute a FOIA lawsuit to help get the documents I sought. In July 2017, the Pentagon released to me a still heavily redacted version of the 2004 DoD IG report. But there are fewer redactions in my copy than there were in the version provided to the Project on Government Oversight (POGO) in 2011, and it provides the clearest evidence yet that Hayden’s account of the THINTHREAD-TRAILBLAZER episode in his memoir is simply not to be believed.

On The IG Investigation Itself

On page 26 of his memoir, Hayden’s only mention of the IG investigation is a single sentence: “Thin Thread’s advocates filed an IG (inspector general) complaint against Trailblazer in 2002.”

Hayden makes no mention of the efforts he and his staff made to downplay THINTHREAD to the IG, or the climate of fear that Hayden and his subordinates created among those who worried TRAILBLAZER was a programmatic train wreck, and that THINTHREAD could, in fact, provide NSA with exactly the critical “finding the needle in the haystack” capability it needed in the digital age.

In its Executive Summary (page ii), the DoD IG report agreed THINTHREAD was the better solution and should be deployed:

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And the DoD IG made it clear that NSA management—meaning Hayden—had deliberately excluded THINTHREAD as an alternative to TRAILBLAZER at a clear cost to taxpayers:

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On Defying Congress

Hayden’s fury at the SARC team keeping HPSCI staffer Roark in the loop about their progress was palpable, as he made clear on page 22 of his book:

The alliance with HPSCI staffer Roark created some unusual dynamics. I essentially had several of the agency’s technicians going outside the chain of command to aggressively lobby a congressional staffer to overturn programmatic and budget decisions that had gone against them internally. That ran counter to my military experience—to put it mildly.

But Binney, Loomis, and Wiebe didn’t owe their allegiance to Hayden—they owed it to the Constitution and the American people. And to be clear, Roark was the driver behind briefing and information requests, performing her mandated oversight role, a fact Hayden clearly resented—to the point that he was willing to defy her requests, as the IG report noted on page 2:

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That defiance of a congressional request went further, as the DoD IG noted on page 99 of their report:

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Hayden didn’t just stiff-arm Roark, he stiff-armed the entire committee.

On Incompetent Program Management and Priorities

Hayden makes clear in his memoir (page 20) that he wanted an orderly approach to the digital traffic problem, even if it meant taking a lot of time to do it:

Our program office had a logical progression in mind: begin with a concept definition phase, then move to a technology demonstration platform to show some initial capability and to identify and reduce technological risk. Limited production and then phased deployment would follow.

The DoD IG investigators viewed Hayden’s approach as ill-considered (p. 4):

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In other words, Hayden had learned nothing from his mistake in sand-bagging THINTHREAD prior to 9/11, and he kept the original, full program on ice even after the loss of nearly 3,000 American lives and daily concerns in the months after the terrorist attacks about possible “sleeper cells” and follow-on attacks.

On THINTHREAD’s scalability

Hayden argues in his memoir (page 22) that THINTHREAD was not deployable across all NSA elements:

The best summary I got from my best technical minds was that aspects of Thin Thread were elegant, but it just wouldn’t scale. NSA has many weaknesses, but rejecting smart technical solutions is not one of them.

The DoD IG investigators disagreed, as this response to Hayden’s team at the time makes clear (p. 106):

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On THINTHREAD’s effectiveness

On page 21 of his book, Hayden gives the reader the impression that THINTHREAD was not that good at actually finding real, actionable intelligence:

We gave it a try and deployed a prototype to Yakima, a foreign satellite (FORNSAT) collection site in central Washington State. Training the system on only one target (among potentially thousands) took several months, and then it did not perform much better than a human would have done. There were too many false positives, indications of something of intelligence value when that wasn’t really true. A lot of human intervention was required.

An analyst who had actually used THINTHREAD after its initial prototype deployment in November 2000 had a very different view (p. 16):

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The second to last sentence is worth repeating: “The analyst received intelligence data that he was not able to receive before using THINTHREAD.” “Not able to receive” from any other NSA system or program. Had THINTHREAD been deployed broadly across NSA and focused on al-Qaeda, it could have helped prevent the 9/11 attacks, as the SARC team and Roark have repeatedly claimed.

On THINTHREAD’s legality

Hayden claims in his memoir (page 24) that NSA’s lawyers viewed THINTHREAD as illegal:

Sometime before 9/11, the Thin Thread advocates approached NSA’s lawyers. The lawyers told them that no system could legally do with US data what Thin Thread was designed to do. Thin Thread was based on the broad collection of metadata that would of necessity include foreign-to-foreign, foreign-to-US, and US-to-foreign communications. In other words, lots of US person data swept up in routine NSA collection.

In fact, as the SARC team noted in A Good American, THINTHREAD’s operational concept was just the opposite: scan the traffic for evidence of foreign bad actors communicating with Americans, segregate and encrypt that traffic, and let the rest go by. No massive data storage problem, no mass spying on Americans.

And the account the DoD IG investigators got from NSA’s Office of General Counsel (page 20) flatly contradicts Hayden’s memoir:

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The “Directive 18” in question is United States Signals Intelligence Directive 18, which governs NSA’s legal obligations regarding the acquisition, storage, and dissemination of data on U.S. persons.

As you can probably imagine, I could cite many other instances of Hayden’s rewriting of the history of the THINTHREAD-TRAILBLAZER episode, but if you want as much of the story as is currently available, I suggest you read the entire (though still heavily redacted) version of the DoD IG report I obtained in July.

The Story Goes On

What’s remarkable is that Congress was well aware of Hayden’s misconduct and mismanagement while at NSA, but it still allowed him to become the head of my former employer, the CIA. Meanwhile, Roark’s personal example of integrity and fidelity to congressional oversight were rendered meaningless by her then-boss, House Intelligence Committee Chairman (and former CIA operations officer) Porter Goss’s (R-FL) failure to fully investigate the THINTHREAD-TRAILBLAZER disaster, and by his Senate colleagues who elected to confirm Hayden to head the CIA by a vote of 78-15. Hayden definitely got one thing very right: He knew he could snow House and Senate members and get away with it.

My FOIA lawsuit is ongoing, and additional document productions are—hopefully—just a few months away. To date, DoD is continuing to invoke the NSA Act of 1959 to keep many details of this saga—especially the amount of money squandered on TRAILBLAZER—from public view. For me, that’s actually a key issue in this case—testing the proposition as to whether NSA, utilizing the 1959 law, can conceal indefinitely waste, fraud, abuse, or even criminal conduct from public disclosure.

But the larger policy issue for me is laying bare, using a real-world case study, a prime example of a hugely consequential congressional oversight failure. The SARC team and Roark continue to argue that had THINTHREAD been fully deployed by early 2001, the 9/11 attacks could’ve been prevented. Drake asserts in A Good American that post-attack testing of THINTHREAD against NSA’s PINWALE database uncovered not only the attacks that happened, but ones that didn’t for various reasons.

And the SARC team and Roark maintain that THINTHREAD could have accomplished NSA’s digital surveillance and early warning mission without the kinds of constitutional violations seen or alleged with programs like the PATRIOT Act’s Sec. 215 telephone metadata program or the FISA Amendments Act Sec. 702 program, the latter currently set to expire at the end of this month and the subject of multiple legislative reform proposals.

None of this was examined by either the Congressional Joint Inquiry or the 9/11 Commission, which means the real history of how the 9/11 attacks happened has yet to be written.

Also pending are two Office of Special Counsel investigations into aspects of this episode—one involving Drake, and the other looking at former Assistant DoD IG John Crane, as I’ve written previously on this site. I’ll have more to say on all of this as documents become available or as events warrant.

December 7, 2017 4:46PM

Johnny Hallyday: Also Bucked Establishment on Taxes

French rocker Johnny Hallyday—the “French Elvis—has passed away at 74. I do not know his music, but it appears that he was an innovator. His sounds were apparently new to French ears, and his willingness to adopt rock styles from the English-speaking world upset the French establishment. But the people adored his music, and he sold 110 million records. So Hallyday and the market got the better of France’s cultural rules.

Hallyday didn’t like French tax rules either. Here is what I wrote in Global Tax Revolution:

The solidarity tax on wealth was imposed in the 1980s under President Francois Mitterrand. It is an annual assessment on net assets above a threshold of about $1 million, and it has graduated rates from 0.55 percent to 1.8 percent. It covers both financial assets and real estate, including principal homes.

One of those hit by the wealth tax was Johnny Hallyday, a famous French rock star and friend of French president Nicolas Sarkozy. Hallyday created a media sensation when he fled to Switzerland in 2006 to avoid the tax. He has said that he will come back to France if Sarkozy “reforms the wealth tax and inheritance law.” Hallyday stated: “I’m sick of paying, that’s all . . . I believe that after all the work I have done over nearly 50 years, my family should be able to live in some serenity. But 70 percent of everything I earn goes to taxes.” A poll in Le Monde found that two-thirds of the French public were sympathetic to Hallyday’s decision.

France still has its wealth tax, but numerous other countries have scrapped theirs as global tax competition has heated up. As for Hallyday, he spent his last decade avoiding the wealth tax in Switzerland and Los Angeles.

December 7, 2017 1:03PM

A Few PIRLS of Wisdom on New Reading Results

The latest international academic assessment results are out—this time focused on 4th grade reading—and the news isn’t great for the United States. But how bad is it? I offer a few thoughts—maybe not that wise, but I needed a super-clever title—that might be worth contemplating.

The exam is the Progress in International Reading Literacy Study—PIRLS—which was administered to roughly representative samples of children in their fourth year of formal schooling in 58 education systems. The systems are mainly national, but also some sub-national levels such as Hong Kong and the Flemish-speaking areas of Belgium. PIRLS seeks to assess various aspects of reading ability, including understanding plots, themes, and other aspects of literary works, and analyzing informational texts. Results are reported both in scale scores, which can range from 0 to 1000, with 500 being the fixed centerpoint, and benchmark levels of “advanced,” “high,” “intermediate,” and “low.” The 2016 results also include a first-time assessment called ePIRLS, which looks at online reading, but it includes only 16 systems and has no trend data so we’ll stick to plain ol’ PIRLS.

Keeping in mind that no test tells you even close to all you need to know to determine how effective an education system is, the first bit of troubling news is that the United States was outperformed by students in 12 systems. Among countries, we were outscored by the Russian Federation, Singapore, Ireland, Finland, Poland, Norway, and Latvia. Some other countries had higher scores, but the differences were not statistically significant, meaning there is a non-negligible possibility the differences were a function of random chance. Also, between 2011 and 2016 we were overtaken by Ireland, Poland, Nothern Ireland, Norway, Chinese Taipei, and England.

The second concerning finding is that, on average, the United States has made no statistically significant improvement since 2001. As the chart below shows, our 2016 result was not significantly better than our 2001 score. We appear to have made some strides between 2001 and 2011 but have clearly dipped since then.

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A few thoughts:

  • It is tempting to attribute the gains between 2001 and 2011 to the No Child Left Behind Act, and it is certainly possible that the standards-and-accountability emphasis of the NCLB era helped to goose scores. It is, however, impossible to conclude that without looking at numerous other variables that affect test scores, including student demographics and such difficult-to-quantify factors as student motivation. More directly, NCLB was passed in very early 2002, so by 2006 it had had several years to start working. But that year reading scores went down for all but the lowest 25 percent of test takers. By 2011, the next iteration, NCLB had become politically toxic.
  • The U.S. PIRLS results are broken down by various student attributes, including race/ethnicity. We need to be very careful about these blunt categories—they contain lots of subsets, and ultimately reduce to millions of individuals for whom race or ethnicity is just one among countless attributes—but they might hint at something of use. Most interesting, perhaps, is that scores for Asian Americans (591) beat the top-performing systems, the Russian Federation (581) and Singapore (576). This might suggest that there is something about culture— East Asian culture especially is thought to focus heavily on academic achievement, general American culture not so much—and that the education system itself might play a relatively small role in broad academic achievement.
  • Or maybe it’s not culture, or culture is wrapped up in lots of other things such as business success, or Asian Americans tend to arrive from wealthier backgrounds to begin with. As seen below, a simple correlation between median household income for each group and their 2016 score is almost perfect at 0.98. (A perfect positive correlation would be 1.0). This also suggests that the system does not have nearly the impact of other factors, but whether it is culture, wealth, or some intertwining of those and many other factors is unclear.

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  • If the system does not matter, at least for standardized reading assessments, then what really hurts about U.S. education policy is that we spend more per-pupil than almost any other country for which we have data but get pretty mediocre results. As of 2013 we spent $11,843 per elementary and secondary student, and in 2016 were beaten by several countries that spent less, including Latvia ($5,995), Poland ($6,644), Ireland ($9,324), and Finland ($9,579).
  • That factors such as culture might matter much more than spending or the system might explain why American school choice programs tend to produce only slightly better standardized test scores but at a fraction of the cost of public schools. Of course, there are also many things people want out of education that might be much more important to them than test scores—raising morally upright, compassionate, creative human beings, for instance—and freeing people to get those things might be the most important and compelling argument for school choice.

That’s it for PIRLS 2016 musings. On to the next standardized test results, and other things that may matter far more.

December 7, 2017 11:56AM

The Use of Euphemisms in Political Debate

Political debate in the modern world is impossible without memorizing a list of euphemisms, and there is no shortage of public opprobrium for those who talk about certain topics without using them.  In addition to the many euphemisms that are accepted by virtually everybody, the political left has its own set of euphemisms associated with political correctness, while the political right has its own set linked to patriotic correctness.  Euphemisms tend to serve as signals of political-tribal membership, but also as means to convince ambivalent voters to support one policy or the other.  Violating the other political tribe’s euphemisms can even help a candidate get elected President.  This post explores why people use euphemisms in political debate and whether that effort is worthwhile. 

Euphemisms change over time.  Harvard psychologist Steven Pinker termed this linguist evolution the "euphemism treadmill" and, over twenty years ago, argued that replacing old terms with new ones was likely inspired by the false theory that language influences thoughts, a notion that has been long discredited by cognitive scientists.  Pinker described how those who board the euphemism treadmill can never step off:

People invent new “polite” words to refer to emotionally laden or distasteful things, but the euphemism becomes tainted by association and the new one that must be found acquires its own negative connotations.

Few political debates are as riddled with euphemisms as immigration.  The accurate legal term “illegal alien,” which was once said without political bias and is now almost exclusively used by nativists, was replaced with “illegal immigrant” which was supplanted by “undocumented immigrant” and, in rarer cases, “unauthorized immigrant.”  Goofy terms like “border infiltrator” and “illegal invader” have not caught on yet.  Proponents of the new term “undocumented immigrant” argue that nobody can be illegal, so the term “illegal immigrant” is inaccurate as well as rude.  Of course, nobody is undocumented either, as they just lack the certain specific documents for legal residency and employment.  Many have drivers licenses, debit cards, library cards, and school identifications which are useful documents in specific contexts but not nearly so much for immigration.  “Misdocumented immigrant” would be better if the goal was accuracy, but the goal seems to be to change people’s opinions on emotional topics by changing the words they use.

In the immigration debate, the euphemism treadmill can sometimes run in reverse and actually make political language harsher.  This "cacophemism cliff" turned “birthright citizenship” into “anchor baby” and “liberalized immigration” into “open borders.” 

In the long run, stepping onto the euphemism treadmill can seem like a fool’s errand.  As Pinker explains, people’s feelings toward the replaced term are merely transferred to the euphemism because we all have concepts that we use words to describe but we don’t use words to invent new concepts.  The concept-to-word cognitive production process only affects the sound of the output, not its meaning.      

Framing – “Undocumented Immigrants” or “Illegal Aliens”

Not all is lost for exercisers on the euphemism treadmill.  They just have to lower their expectations and be satisfied with framing political discourse, rather than the quixotic goal of changing concepts with words.  Framing is a psychological technique that can influence the perception of social phenomena, a political or social movement, or a leader.  Research in political psychology has shown that framing works through making certain beliefs accessible in memory upon exposure to a particular frame. Once certain beliefs are activated through the mechanism of framing, they affect all the subsequent information processing. An example of framing’s power to affect perception is that opinions about a Ku Klux Klan rally vary depending on whether it is framed as a public safety or free speech issue.

Framing can steer public opinion in opposite directions of the political spectrum. The “undocumented immigrant” frame will invoke different beliefs from the “illegal alien” frame. Specifically, the former is describing the issue as a bureaucratic government problem afflicting ordinary immigrants.  The latter frames it as a law and order problem with foreign nationals. These two euphemisms, although meant to represent the same concept, do so in different ways that convey different messages and will pull the receivers of the frames in different directions.  Most people feel sympathy toward those caught up in a cruel bureaucratic morass but are much less sympathetic to lawbreakers.

Following this logic, a policy proposal titled “path to citizenship for undocumented immigrants” is going to attract more support than “amnesty for illegal aliens.” Both “path to citizenship” and “amnesty” here mean legalization. However, the term “legalization” implies that there has been something illegal about that group of people, an association which many proponents want to avoid. “Path to citizenship” is a much softer frame that invokes positive emotions.  On the other side of the debate, “legalization” has been replaced with “amnesty,” which has a more negative meaning.  Proponents and users of the term “amnesty” are emphasizing that it is a pardon for an offense rather than a fix of a bureaucratic problem. “Pathway to citizenship” is also sometimes replaced by “earned legalization” or “comprehensive immigration reform.” These two expressions bring up considerations about legality and reform, both of which are far more cognitively charged than “path to citizenship” and therefore less likely to be used by supporters of such policies.

Dog Whistles and the Threat Frame: “Extreme Vetting,” “Illegal Invader,” and “Anchor Baby”

Euphemisms can help legitimize otherwise prejudiced rhetoric. Consider “extreme vetting”, a phrase that has been referred to as a euphemism for “discrimination against Muslims.” Using this particular euphemism helps one accomplish two goals. First, it helps separate oneself from blatant discrimination based on religion or national origin, which is important because prior research in political science has shown that people are increasingly sensitive to social desirability and so are unwilling to express bluntly prejudiced beliefs since it has become less socially acceptable to do so. Thus, masking such prejudice under a neutral euphemism is rather useful in that regard. Second, it still conveys the overall message of hostility to the audience that is receptive to such rhetoric – also known as a dog whistle. Therefore, you can indicate your own beliefs and connect the audience with similar beliefs without coming across as being bluntly prejudiced.

A somewhat similar idea is behind the use of the “illegal invader” term, which goes even further by invoking a threat frame. Threats could be powerful tools since, once threatened, people tend to overestimate the risk and support policies that minimize the threat no matter how small it actually is.  Threat frames negatively bias listeners against this group.

An important effect of threat frame euphemisms is that they can dehumanize and attach negative attitudes to certain groups. Consider the euphemisms “anchor baby” and “catch and release.” “Anchor baby” stands for children born to foreign nationals who are in violation of their immigration status while on U.S. soil.  Those children have automatic citizenship under the U.S. Constitution.  Such children are called “anchor babies” in order to highlight the idea that they are used by their parents to secure their stay in the country although that rarely actually happens. The term dehumanizes both the parents and their children by describing these individuals through association with an inanimate object, the “anchor,” and that the only purpose for the existence of the children is to resolve the parent’s problem with immigration law.  Threat frames also extend to other criminal activity related to immigrants.  

There are examples of other indirect expressions that are not euphemisms. Let us consider “catch and release” and “sanctuary city.” “Catch and release” is used to describe an act of apprehending illegal immigrants and subsequently releasing them. A “sanctuary city” is a city that limits their cooperation with federal immigration enforcement.  These two are used by both sides of the immigration debate and do not have a positive or a negative substitute. The problem with them is that both the expressions might as well pertain to the “animal kingdom” domain, which can be demeaning and humiliating when used to talk about people. “Catch and release” brings up associations with fishing and hunting, thus dehumanizing those that are being caught and released. Similarly, the word “sanctuary” is frequently used to describe a wildlife refuge. Similar to the “anchor baby,” they are of dehumanizing character.  Both of these euphemistic expressions, although not meant to do any harm and not created by political elites, could generate unfavorable attitudes.

Euphemisms as Subliminal Primes

Euphemisms are effective as subliminal primes because they are short and compact expressions.  Priming is an instrument that activates preconscious expectations according to research in political psychology.  Priming is similar to framing but has important differences, as it invokes an automatic reaction without the reader having to read through the whole article. Even a split-second glimpse at the title has the priming effect. As opposed to frames, primes require less time and less cognitive effort to be successful in shaping public opinion.  Primes color the perception of all information that follows the prime.  Consider the hypothetical article titles “Birthright Citizenship for Children of Undocumented Immigrants” versus “Illegal Alien Anchor Babies.” Although these two expressions technically have a similar meaning, they can subconsciously prime the reader and bias all of his subsequent information processing. The reader who encounters the first of the two expressions is likely to have a pro-immigration bias primed, whereas the second will have the opposite direction bias.

Euphemisms as primes are particularly meaningful for citizens who are ambivalent about immigration. Consider a relatively more liberal person who is undecided on immigration. By encountering a random piece of news that uses “undocumented immigrants” instead of “illegal aliens,” an ambivalent voter is more likely to form a pro-immigration bias at a rather early stage because of his greater innate support for fairness, which is offended by the unequal distribution of documents. Whereas a relatively more conservative person who is undecided about immigration is far more likely to be swayed by the term “illegal alien”, because of their greater support for order and structure, which is offended by illegality. 

Conclusion

This post explores the theoretical base of using euphemisms as tools of influence. Although there is some excellent research into these issues related to immigration, it is a field crying out for more experimental and empirical inquiry. Laboratory experiments with human subjects could confirm the effectiveness of specific euphemisms as primes or frames. Since such studies are often criticized for their external validity, a follow-up study that combines content analysis of relevant media with opinion polls that show changes in attitudes could also be useful.

An underexplored possibility is how euphemisms and frames affect political debate by spreading confusion.  People accustomed to the term “illegal immigrant” to describe foreign-born persons who are currently unlawfully residing in the United States might initially fail to react as negatively to the term “undocumented immigrant” merely because they don’t know what it means.  As soon as they know what it means, however, the negative feelings they associate with “illegal immigrant” would probably attach to the term “illegal alien.”  Another is how euphemisms build walls around political tribes and prevent them from talking to each other, thus deepening policy divisions that prevent middle-ground solutions. 

Special thanks to Jen Sidorova for her initial rough draft as well as her invaluable insights and research.  

December 7, 2017 9:55AM

Hayek on the Creation of Moral Hazard by Central Banks

Some years ago I published a paper on the banking theory and policy views of the important twentieth-century economist Friedrich A. Hayek, entitled “Why Didn't Hayek Favor Laissez Faire in Banking?[1] Very recently, working on a new paper on Hayek’s changing views of the gold standard, I discovered an important but previously overlooked passage on banking policy in a 1925 article by Hayek entitled “Monetary Policy in the United States After the Recovery from the Crisis of 1920.” I missed the passage earlier because the full text of Hayek’s article became available in English translation only in 1999, the same year my article appeared, in volume 5 of his Collected Works. Only an excerpt had appeared in translation in Money, Capital, and Fluctuations, the 1984 volume of Hayek’s early essays.[2]

Hayek wrote the article in December 1924, very early in his career. In May 1924 he had returned from a post-doctoral stay in New York City and had begun participating in the Vienna seminar run by Ludwig von Mises. It is safe to say that the passage I am about to quote reflects Mises’ influence, since the article cites him, and in many ways takes positions opposite to those Hayek had taken in an earlier article that he wrote while still in New York.

The main topic of the 1925 article is the Federal Reserve’s policies in the peculiar postwar situation in which, as Hayek put it, the US “emerged from the war … as the only country of importance to have retained the gold standard intact.” The US had received “immense amounts” of European gold during and since the war (Hayek documents this movement with pertinent statistical tables and charts), and now held a huge share of the world’s gold reserves — more gold reserves than the Fed knew what to do with. European currencies, having left the gold standard to use inflationary finance during the First World War, and not having yet resumed direct redeemability, were for the time being pegged to the gold-redeemable US dollar. This was a new and unsettled “gold exchange standard,” unlike the prewar classical gold standard in which major nations redeemed their liabilities directly for gold and held their own gold reserves. Rather than delve into what Hayek had to say about that topic, I want to convey what he said about banking.

In section 8 of the article (pp. 145-47 in the 1999 translation), Hayek gives a favorable evaluation of free banking as against central banking. Having overlooked this passage, I had previously thought that Hayek first addressed free banking in his 1937 book Monetary Nationalism and International Stability. Hayek does not embrace free banking as an ideal, first-best system, because he thought it prone to over-issue (as I discussed in my 1999 article based on Hayek’s other writings). But he criticizes the Federal Reserve Act for relaxing rather than strengthening the prior system’s constraints against excess credit expansion by American commercial banks.

Hayek begins the passage with a caution that the intended result of creating a central bank, when the intention is to avoid or mitigate financial crises, need not be the actual result:

It cannot be taken for granted that a central banking system is better suited to prevent disturbances in the economy stemming from excessive variations in the volume of available bank credit than a system of independent and self-reliant commercial banks run on purely private enterprise (liquidity, profitability) lines.

By standing ready to help commercial banks out of liquidity trouble, central banks give “added incentive … to commercial banks to extend a large volume of credit.” In modern terminology, a lender of last resort creates moral hazard in commercial banking. A free banking system (my phrase, not his) restrains excessive credit creation by fear of failure:

In the absence of any central bank, the strongest restraint on individual banks against extending excessive credit in the rising phase of economic activity is the need to maintain sufficient liquidity to face the demands of a period of tight money from their own resources.

Hayek’s belief that the pre-Fed US system did not restrain credit creation firmly enough is understandable in light of the five financial panics during the fifty years of the federally regulated “National Banking system” that prevailed between the Civil War and the First World War. He might have noted, however, that the National Banking system was a system legislatively hobbled by branching and note-issue restrictions rather than a free banking system or a system “run on purely private enterprise lines.”[3] The Canadian banking system, lacking those restrictions, did not experience financial panics during this period (or even during the Great Depression) despite having an otherwise similar largely agricultural economy.

Despite the flawed character of the pre-Fed system, Hayek judged that the Federal Reserve Act made the situation worse rather than better by loosening the prevailing constraints against unwarranted credit expansions:

Had banking legislation had the primary gold to prevent cyclical fluctuations, its main efforts should have been directed towards limiting credit expansion, perhaps along the lines proposed — in an extreme, yet ineffective way — by the theorists of the “currency school,” who sought to accomplish this purpose by imposing limitations upon the issuing of uncovered notes. … Largely because of the public conception of their function, central banks are intrinsically inclined to direct their activities primarily towards easing the money market, while their hands are practically tied when it comes to preventing economically unjustified credit extension, even if they should favour such an action. …

This applies especially to a central banking mechanism superimposed on an existing banking system. … The American bank reform of 1913-14 followed the path of least resistance by relaxing the existing rigid restraints of the credit system rather than choosing the alternative path …

Thus the Fed was granted the power to expand money and credit, a power that “was fully exploited during and immediately after the war,” not waiting for a banking liquidity crisis. The annual inflation rate in the United States, as measured by the CPI, exceeded 20 percent in 1917, and remained in double digits for the next three years (17.5, 14.9, and 15.8) before the partial reversal of 1921. Hayek (p. 147) observed ruefully “how large an expansion of credit took place under the new system without exceeding the legal limits and without activating in time automatic countermeasures forcing the banks to restrict credit.” He concluded: “There can be no doubt that the introduction of the central banking system increased the leeway in the fluctuations of the volume of bank credit in use."

Here Hayek reminds us that a less-regulated banking system does not need to be perfect to be better than even well-intentioned heavier regulatory intervention. Good intentions do not equal good results in bank regulation.

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[1] Lawrence H. White, "Why Didn't Hayek Favor Laissez Faire in Banking?History of Political Economy 31 (Winter 1999), pp. 753-769. I also published a companion paper on his monetary theory: Lawrence H. White "Hayek's Monetary Theory and Policy: A Critical Reconstruction," Journal of Money, Credit, and Banking 31 (February 1999), pp. 109-20.

[2] F. A. Hayek, “Monetary Policy in the United States after the Recovery from the Crisis of 1920,” in Good Money Part I: The New World, ed. Stephen Kresge, vol. 5 of The Collected Works of F. A. Hayek (Chicago: University of Chicago Press, 1999); F. A. Hayek, Money, Capital, and Fluctuations: Early Essays, ed. Roy McCloughry (Chicago: University of Chicago Press, 1984).

[3] See Vera C. Smith, The Rationale of Central Banking (Indianapolis: Liberty Fund, 1990), chapter 11; and George A. Selgin and Lawrence H. White, "Monetary Reform and the Redemption of National Bank Notes, 1863-1913," The Business History Review 68, no. 2 (1994), pp. 205-43.

[Cross-posted from Alt-M.org]

December 6, 2017 5:29PM

Supreme Court Continues Its Gun‐​Shy Ways

By Trevor Burrus and Matthew Larosiere

Over a decade ago, James Hamilton was convicted of a felony in Virginia, for which he served no jail time. Since then, the state of Virginia has restored all of his civil rights, including the right to possess firearms. In the years since then, Hamilton has worked as an armed guard, firearms instructor, and protective officer for the Department of Homeland Security. Despite never exhibiting any violent tendencies and leading a stable family, the state of Maryland, where Hamilton now resides, forbids him from possessing firearms because of that decade-old Virginia conviction.

Hamilton challenged Maryland’s absolute prohibition on the possession of firearms by felons as applied to him, arguing that, while there may be reasons for forbidding some felons from owning firearms, the prohibition made no sense when applied to him, a person who committed a non-violent felony over a decade ago. The Fourth Circuit, however, decided that Hamilton was not eligible to bring an as-applied challenge to Maryland’s law, leaving states in the Fourth Circuit wide latitude to abuse the constitutional rights of a huge class of citizens and leaving those citizens with no way to vindicate their rights.

On petition to the Supreme Court, Cato submitted a brief as amicus curiae, arguing for the court to hear Hamilton’s case. We argued that, by allowing the Fourth Circuit to defer to state legislatures in defining who is and is not entitled to Second Amendment protection, the Fourth Circuit allowed Maryland to define the scope of a constitutional right, in direct contravention of Supreme Court precedent, specifically Heller. In general, lower courts have shown tremendous zeal in treating the Second Amendment as a second-class right—even after Heller and McDonald—and those concerns are magnified here, where the Fourth Circuit ruled that a person cannot even bring an as-applied challenge to a law that burdens the exercise of a constitutional right. The Fourth Circuit justified its position by quoting Supreme Court language referring to felon-in-possession bans as “presumptively constitutional.” However, that is not how the Fourth Circuit has treated this law. A restriction that is not capable of being defeated is not “presumptively lawful,” it is absolutely and inviolably lawful, and thus we urged the Supreme Court to step in and rein in this abuse by the lower court. The Supreme Court declined.

Hamilton is another in a long line of Second Amendment cases that the Supreme Court has refused to hear, including one just last week challenging Maryland's "assault weapons" ban. Hamilton is particularly unfortunate because, if taken far enough, states could deny large portions of their citizens the right to keep and bear arms without any way to remedy their loss. Hamilton’s case was a great vessel for the Supreme Court to clarify Heller and McDonald and finally force the circuit courts to make Second Amendment decisions with some modicum of consistency. A decade-old, non-violent, non-firearm-related felony for which Hamilton served no time is no reason to strip him of the basic human right of effective self-defense.

December 6, 2017 3:45PM

How to Deal with Honduras’ Quagmire

There are good reasons to believe that fraud took place in Honduras’ presidential election. The Economist did a statistical analysis of the election results and found “reasons to worry” about the integrity of the vote—although they were not conclusive. A report from the Organization of American States Observation Mission points out “irregularities, mistakes, and systemic problems plaguing this election [that] make it difficult… to be certain about the outcome.”

At the heart of the controversy is how the results of the presidential election shifted dramatically after a blackout in the release of information that lasted nearly 38 hours. A first report released by the Electoral Tribunal (TSE) on Monday 27 November at 1:30 am (ten hours after polls closed and after both leading contenders had declared themselves the winners) showed opposition candidate Salvador Nasralla leading incumbent president Juan Orlando Hernández 45.17% versus 40.21%, with 57.18% of tally sheets from polling stations counted.

Then came the blackout, during which officials from Hernandez’s National Party argued that the results would be reversed once the release of information resumed. Their claim was that the tally sheets initially reported came from polling stations in urban areas, whereas the National Party strongholds are in rural areas. Indeed, when the TSE began releasing information again on Tuesday afternoon, Nasralla’s five point lead steadily declined and then disappeared. With almost all votes counted, Hernández is now ahead by 1.6 points.

Other irregularities documented by the OAS include missing tally sheets, opened and incomplete containers with electoral material from polling stations, and undisclosed criteria for processing the ballots that arrived at the TSE collection center.

What now? The opposition is demanding a full Florida-style recount. This would prolong the uncertainty about who won the election, but given the extent of irregularities, it seems a fair request. However, some officials from Nasralla’s camp also claim that the election has been irretrievably tainted. Nasralla himself proposed a run-off vote with Hernández, but the constitution does not allow for such possibility. The real danger is that the opposition will reject anything short of a repeat of the election, even if there is a transparent recount. A repeat of the election, expensive as it is, would also create an ominous precedent for contesting close election results in the future.

It is also fair to say that Nasralla’s camp is not likely to concede defeat under any circumstances. His left-wing coalition—conspicuously named the "Opposition Alliance against the Dictatorship"—was going to cry foul if Nasralla was defeated, regardless of the margin. He also reneged on a signed pledge to respect the result emanating from the TSE and threatened to continue the chaos brought about by his supporters “until the country comes to an end.” Instead of being a responsible actor during the crisis, Nasralla is increasingly giving the impression that he does not want an institutional solution to it. For example, Nasralla has yet to file a formal challenge to the election, despite the fact that a legal deadline was extended until Friday in order to give his Alliance more time to do so. He has not presented evidence of manipulated tally sheets either.

There are no easy ways out of this quagmire and it is likely that one side will end up feeling cheated. Still, a solution needs to be worked out: The TSE should facilitate the verification of all the 18,103 tally sheets and, if anomalies arise, allow for a recount of those where there are discrepancies. This process should be closely monitored by observers from the Organization of American States and the European Union. It is their task to serve as ultimate arbiters and certify whether the conditions have been met for a transparent verification and recount process.

A post-election institutional arrangement could be part of the solution: Since Honduras’ Constitutional Court struck down the prohibition on presidential reelection, the Congress should establish non-consecutive reelection (such as in Chile, Costa Rica, and Uruguay). In addition, a run-off should be introduced for presidential elections. Finally, the appointment of the TSE justices should be taken away from Congress and given to the Supreme Court in order to guarantee their impartiality.