The Deep State (20 page)

You cannot hope

to bribe or twist,

thank God! the

British journalist.

But, seeing what

the man will do

unbribed, there's

no occasion to.

Congress's Subservience to Corporations

Once the law was seized at its source, it did not take much to permeate the institutions of government, whose major players have largely become subservient to corporate needs. I saw this submissiveness on several occasions. One memorable incident was the passage of the Foreign Intelligence Surveillance Act Amendments of 2008, a piece of legislation that retroactively legalized the Bush administration's illegal and unconstitutional surveillance (first revealed by the
New York Times
in 2005) and indemnified the telecommunications companies for their cooperation. The bill passed easily: all that was required was the invocation of the word “terrorism,” and most members of Congress responded both to the siren call of “national security” and to the prospect of donations from the telecommunications companies.
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One such was Senator Barack Obama, soon to be coronated at the Democratic National Convention in Denver. He had already won the most delegates in the primary races while campaigning to the left of his main opponent, Hillary Clinton, by pointing out the excesses of the war on terrorism and denouncing the erosion of constitutional liberties. Months earlier he had even supported a filibuster against any bill that
would bestow retroactive immunity on the telecoms.
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What happened? Had Obama “grown” and become a more “thoughtful” or “serious” person—to use the language of the Beltway for anyone aspiring to conventional wisdom—or had the dawning prospect of the presidency forced him to reconsider his position in an effort not to offend powerful constituencies in a position to aid or hinder his campaign?

Obama's political conversion is a microcosm of the evolution of Congress as a whole since the Vietnam War. There was a time when Congress used to engage in serious debate and occasionally take tough stands opposing the alleged imperatives of national security. Over the last three decades, however, and particularly since 9/11, it has increasingly abdicated its powers and transferred them to the executive branch. This development makes a depressing study for anyone who takes seriously the checks and balances that the Founders designed into the U.S. constitutional system.

In 1970, both houses of Congress agreed to the Cooper-Church Amendment, which stipulated that the administration could not spend funds for soldiers, combat assistance, advisers, or bombing operations in Cambodia. In June 1973, Congress passed an amendment to prohibit the use of additional funds in Southeast Asia after August 15 of that year. Most significant of all, Congress then passed the War Powers Resolution over President Nixon's veto. The legislation imposed restrictions on the executive branch to ensure that the president would have to consult with the House and Senate before sending troops into conflict or potential conflict for extended periods.

In the post-9/11 period, by contrast, Congress has never mustered the collective will to cut off funds or force troop withdrawals, no matter how forlorn the situation. Even
after
the final withdrawal of troops from Iraq at the end of 2011 (an action taken entirely at the initiative of the president and according to his own timetable), Congress could not summon the nerve to agree to an amendment to repeal the original authorization for use of force in Iraq. The chairman of the Senate Armed Services Committee, Carl Levin (D-MI), said it was a bad idea because the amendment
would (as he expressed it in the wearisome legislative cliché) “tie the hands of the president.” Although Levin's bromide is now conventional wisdom, it is at variance with the view of President James Madison, the principal author of the separation of powers doctrine: “The power to declare war, including the power of judging the causes of war, is
fully
and
exclusively
vested in the legislature . . . the executive has no right, in any case, to decide the question, whether there is or is not cause for declaring war.”

Congress has disempowered itself of its legislative authority and allowed a serious debasement in the tenor and decorum of its operations. I listened carefully to the debate preceding the authorization for use of force in the Persian Gulf War in 1991, and it struck me as substantive and thoughtful, accommodating a wide range of views. The same debate a dozen years later, prior to the invasion of Iraq, was the perfunctory overture to a legislative rubber stamp. Congress cannot even exercise its fundamental oversight functions anymore. The October 1982 Beirut, Lebanon, barracks bombing, which killed 241 U.S. military personnel, resulted in a thorough and mostly apolitical investigation of the serious deficiencies in the military's chain of command, rules of engagement, and medical evacuation practices—all of which were addressed. The 2012 attack on the U.S. consulate in Benghazi, Libya, by contrast, led to talking points, campaign ads, and elected officials making jackasses of themselves.

Politics Starts at the Water's Edge: Foreign Policy as a Political Football

Congress has in truth ceded the field in national security policy; only a few members remain who even recognize that other countries might have a perception of their own vital interests, and that taking these into account, along with history, geography, and trade issues, ought to inform congressional policy positions, rather than simply bowing to homegrown lobbies with vested interests. Most members in any case, preoccupied as they are with polarized domestic issues, have little interest in national
security matters beyond local pork projects if they happen to have a military or contractor presence in their districts. Beyond that, national security policy is hardly more than a stick with which to beat the other political party as the occasion arises. Most members of Congress do not really like having to go on record with a clear yes or no vote on a critical matter of foreign policy. In a rare outburst of candor, one member, Jack Kingston, a Georgia Republican, gave an accurate assessment of the prevailing attitude when asked whether Congress would seek a timely debate on the authorization of military action against ISIS:

A lot of people would like to stay on the sideline and say, “Just bomb the place and tell us about it later.” It's an election year. A lot of Democrats don't know how it would play in their party, and Republicans don't want to change anything. We like the path we're on now. We can denounce it if it goes bad, and praise it if it goes well and ask what took him so long.
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Kingston's unusual frankness may be explained by the fact that he had lost his primary election and would not be returning to Congress. As it turned out, Congress postponed a full debate on the military authorization until after the November 2014 midterm election: in their deathly fear of being held accountable to voters, members preferred to wait several months until a lame-duck session for their voices to be heard on a supposedly crucial matter of national security (as it turned out, even the lame-duck session came and went with no congressional action).

The Republican Party is slightly ahead of Democrats when it comes to devaluing any traditional understanding of foreign and national security policy. This is not surprising, because in all other matters of public policy, the GOP has strictly subordinated practical governance and problem solving to the emotional thematics of an endless political campaign. Whether the topic is Iran, Russia, or the proper level of defense spending at a time of high deficits, the GOP's stance has little to do with the merits of the situation; it is a projection of domestic political sloganeering.
Taking a position on anything, whether it be Ukraine or the efficacy of drones, boils down to a talking-point projection of focus group–tested emotional themes: strength versus weakness, standing tall versus cutting and running, acting versus thinking.

It is sometimes confusingly contradictory: over the course of Barack Obama's presidency, Republicans have hammered on the theme that the president is an out-of-control, unconstitutional tyrant when it comes to domestic issues like health care. When the subject matter shifts overseas, however, he suddenly becomes a weak, indecisive, appeasing milquetoast. The contradiction does not matter, because no one is really proposing a meaningful solution to a foreign policy problem; it is just a dog whistle to rally an angry political base lacking the wit to notice the contradiction. Whenever a presidential wannabe like Senator Marco Rubio wishes to establish himself as a man of gravitas with what press secretaries typically bill as a “major foreign policy address,” the resultant speech is a word salad of decades-old clichés that inevitably invokes Ronald Reagan, peace through strength, our men and women in uniform, everlasting friendship with Israel, eternal vigilance, and no more Munichs. Of such sketchy material is presidential timber made.

One might have hoped that this dysfunction would be confined to GOP elective officeholders, but even a Republican former secretary of state, Condoleezza Rice, has succumbed to the temptation. A couple of weeks after the eruption of the crisis over Russia's annexation of Crimea, Rice unburdened herself of the standard menu of foreign policy bromides: America must not become “war weary . . . as Ronald Reagan said, peace only comes through strength. . . . When America steps back and there is a vacuum, trouble will fill that vacuum. . . . What are we signaling when we say that America is no longer ready to stand in the defense of freedom?”
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As for concrete steps the United States might take to address the crisis and advance its interests, none was on offer.

The self-lobotomizing of Congress is one of the chief reasons why the executive branch, and behind it the Deep State of contractors, lobbyists, and think-tank experts, has filled the void of decision making in
Washington. It is less that they seized the levers of government than that they walked into an institutional void. Outrageous partisan rhetoric, specifically designed to stir up media attention and energize the party bases, has become the daily currency of visible politics in Washington. This legislative circus camouflages the fact that Congress has become a largely symbolic institution, like the French Estates-General during the ancien régime. It is ineffectual and paralyzed because significant issues can never be taken up until after the next election—and the next election is always looming. The real power has shifted to other groups, impervious to elections, beyond the control of Congress and, by extension, the American people. One of those groups, Silicon Valley, has become enormously powerful because of its impact on the economy, social habits, and the very meaning of privacy.

It was terribly dangerous to let your thoughts wander when you were in any public place or within range of a telescreen. The smallest thing could give you away. A nervous tic, an unconscious look of anxiety, a habit of muttering to yourself—anything that carried with it the suggestion of abnormality, of having something to hide.

—George Orwell,
1984

They're reminders to all Americans that they need to watch what they say, watch what they do.

—Presidential press secretary Ari Fleischer, September 26, 2001

Evil Is as Evil Does

Google probably never imagined that its hipster slogan “Don't be evil” would become the focus not only of irony, but of serious historians of twenty-first-century U.S. national security policy. Since Edward Snowden's revelations about the extent and depth of surveillance by the NSA, it has become evident that Silicon Valley is a vital node of the Deep State. Unlike military contractors, or intelligence contractors like Booz Allen, Silicon Valley overwhelmingly sells to the private market, but its business is so important to the government that an unusual relationship has emerged.

While Washington could simply dragoon the high-technology companies to do its bidding, it prefers cooperation with so important an engine of the nation's economy. Perhaps this explains the extraordinary indulgence the government shows the Valley in intellectual property
matters—if an American “jailbreaks” his electronic device (i.e., modifies it so that it can use another service provider than the one dictated by the manufacturer, or uses an unapproved application), he can, under certain circumstances, be fined up to $500,000 and sent to prison. So much for America's vaunted property rights.
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In recent years, Silicon Valley has begun to rival if not surpass Wall Street as a money machine. During the last several years, the San Francisco Bay area has experienced the same symptoms New Yorkers have lived with since the unleashing of Wall Street thirty years ago: stratospheric housing prices, higher consumer prices (since a relative handful of the rich can bid up the price level of restaurants, medical care, and day care), and telltale signs of social stratification like the “Google bus” that whisks its well-heeled occupants from their tony San Francisco homes to their jobs without the indignity of using public transportation.
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Just as information technology has not quite lived up to its billing as a great liberating and democratizing force, neither has it entirely fulfilled its hype as an engine of American prosperity. Undeniably, the IT industry has been one of the few sectors of the U.S. economy to see impressive job growth: According to the Bureau of Labor Statistics, between 2001 and 2011, 565,000 IT-related jobs were created in America, a 22 percent increase, greatly surpassing an anemic 0.2 percent average increase in other sectors. Despite being a driver of the national economy, however, the tech industry has not produced the number of jobs one might expect: the vast majority of its touch labor is performed in outsourced and offshored factories at low wages, and the “good high-tech jobs” are not nearly as plentiful in America as the manufacturing jobs of the post–World War II era. George Packer, who has written extensively on the industry, reports that a venture capitalist told him the Valley has been responsible for more jobs lost than created.
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Just as with financial services, high tech has been prone to bubbles. The first dot-com mania of the 1990s gave us tech start-ups with huge market capitalizations but little or no revenue. Who would have thought an online pet food store would become the great hope of venture capitalists?
Just before its initial public offering, the revenues of Pets.com were only about one-twentieth of what it spent on advertising, but investors were undeterred. Within a month of its IPO, Pets.com shareholders lost $300 million. The puncturing of the tech bubble in 2000 was just the prelude to Wall Street's own boom and bust. In the years after the collapse of the housing market in 2008, tech stocks have once again reached dizzying heights. Some stock analysts say we could be approaching another bubble.
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Indulgent intellectual property laws, trade and tax policies that encourage the offshoring of production, and a knack for tax avoidance have emboldened tech companies to move several hundred billions in cash offshore. A substantial portion of the money IT makes, even domestically, is stashed abroad in low-tax or no-tax countries and not repatriated, so that it cannot be put to work in research and development, hire American workers, or declared as taxable profits. A 2013 Senate investigation of Apple revealed that it had cut its tax bill by $10 billion per year over the previous four years by squirreling away profits overseas.
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Apple and other tech companies allocate as many of their corporate costs as possible to the United States, which offers generous corporate tax deductions, and book their profits in jurisdictions with low tax rates. Bloomberg News has estimated that the top ten U.S. companies practicing this scheme happen to be tech companies.
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Here are the companies and their overseas profits:

1. Microsoft, $76.4 billion

2. IBM, $44.4 billion

3. Cisco Systems, $41.3 billion

4. Apple, $40.4 billion

5. Hewlett-Packard, $33.4 billion

6. Google, $33.3 billion

7. Oracle, $26.2 billion

8. Dell, $19.0 billion

9. Intel, $17.5 billion

10. Qualcomm, $16.4 billion
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With that kind of money sloshing around, Silicon Valley's moguls are beginning to displace the buccaneers of Wall Street as the symbols of our new gilded age: Google's Eric Schmidt, with $106 million in annual compensation, makes JP Morgan Chase's Jamie Dimon, at a mere $20 million, look like a pauper. It's hell to be the poorest member of the country club!

The Libertarian Moguls

The social liberalism of tech executives like Mark Zuckerberg is hardly the man-bites-dog story it is sometimes made out to be, nor is it particularly good news for progressive activists who envision the Valley's philanthropic contributions going to their cherished causes. Socially liberal billionaires have been with us a long time; the news media, for some reason, always swoon over a Republican who favors gay marriage. But the libertarian pose of some Silicon Valley moguls, so carefully cultivated in their public relations, is a bit of a sham.

Peter Thiel is a Silicon Valley tycoon noted for his love of Ayn Rand, his desire to build offshore “seasteading” habitations beyond the reach of law, where libertarian ideals will rule, and his belief that freedom and democracy are incompatible. Thiel, who sounds about as antisocial as a blood tick, unburdened himself in 2009 on the unfitness of his fellow Americans to live in his libertarian utopia with a Nietzschean
Übermensch
such as himself:

The higher one's IQ, the more pessimistic one becomes about free-market politics—capitalism simply is not that popular with the crowd. . . . The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of “capitalist democracy” into an oxymoron.
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Nevertheless, this principled antistatist built one of his start-up companies, Palantir, with the infusion of $2 million in venture capital funding from the CIA. Palantir is a purveyor of “big data” whose customers include the NSA, the FBI, and the CIA; the U.S. Chamber of Commerce, one of its corporate clients, hired Palantir (through a lobbying firm) to spy on inconvenient domestic political groups.
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It does not require a great deal of imagination to understand why a former secretary of state, Condoleezza Rice, and a former CIA director, George Tenet, should be among Palantir's advisers, but it is puzzling why a tech company that touts itself as cutting edge and disruptive, whose corporate advertising persona is premised on hippie nonconformity and even resistance to the idea of being subject to U.S. laws, should rely on CIA funding and be advised by Washington big shots.
10

Marc Andreessen, perhaps the most famous of Silicon Valley's venture capitalists, is a rather pure example of the high-tech visionary and libertarian. He has shared his philosophy with the public in numerous tweets. The technology of the future not only will
not
eliminate jobs: it will utterly abolish poverty. Sounding like a cross between Ayn Rand and H. G. Wells, Andreessen writes that technology will eliminate planetary resource constraints and allow each member of humanity to become his own philosopher king: “Human nature expresses itself fully, for the first time in history. Without physical need constraints, we will be whoever we want to be.” And: “Imagine six, or 10, billion people doing nothing but arts and sciences, culture and exploring and learning. What a world that would be.”
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Pretty heady stuff to imagine a time when no one is stuck taking out the trash!

So how is Andreessen's utopia to be achieved? Naturally, by getting off Silicon Valley's back and letting it do its thing. He paints those critical of some of the social and economic consequences of high tech as Luddites who are opposed to technology per se: “Make no mistake, advocating slowing tech change to preserve jobs equals advocating punishing consumers, stalling quality of life improvements.” He advocates no regulations on the industry and the lowest taxes possible. The only positive
thing government should do with respect to technology companies, apparently, is to allow unfettered immigration: a cause for which Andreessen and his fellow tycoons have lobbied Washington. The eternal demons of poverty and income inequality will be banished by the old standby recommendation of the CEO class: “increasing access to education.” Showing his softer side, Andreessen also recommends a “vigorous social safety net.”

Andreessen's stirring rhetoric dodges some crucial questions: If the tech industry's business model is predicated on avoiding U.S. taxation by stashing profits overseas (a practice that other industries are rushing to emulate through schemes like “tax inversion,” whereby a firm merges with a foreign company and moves its headquarters offshore), what will happen to the domestic tax base that must pay for our rising generation of philosopher kings to be educated? Despite information technology's undeniable role in the rapid diffusion of information over the past twenty years, have American educational standards made commensurate strides? What does that say about technology's alleged ability to revolutionize human learning capacity? While correlation is not causation, Andreessen's prediction that technology will eliminate poverty should give us pause: two decades of explosive dissemination of technology have been accompanied by rising, not falling, income inequality, and the number of food stamp recipients is at a record level.

The NSA and Silicon Valley: Not Always at Arm's Length

Silicon Valley has long been tracking for commercial purposes the activities of every person who uses an electronic device. It is not surprising that the Deep State should wish to hijack the data for its own purposes. Nor is it surprising that it should obtain the Valley's assistance, although it is not yet clear to what degree this assistance has been voluntary. It is of course in the companies' self-interest to make it appear that the cooperation was coerced because of widespread indignation over NSA surveillance. Some degree of coercion is undeniable: according to documents declassified by
the director of national intelligence, in 2007 Yahoo faced fines of $250,000 a day, to double each week, when it balked on Fourth Amendment grounds at providing access to user information to the NSA without a judicial warrant.
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The documents that Edward Snowden gave to journalists suggest that some of the tech industry's cooperation has been more enthusiastic, however. According to one classified file, an unidentified corporate “partner” of the NSA was “aggressively involved in shaping traffic to run signals of interest past our monitors.”
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Other documents reveal email exchanges between NSA director general Keith Alexander and Google executives Eric Schmidt and Sergey Brin which undermine their claims that their cooperation with the agency was legally compelled. The emails suggest cordial relations with the NSA director, who arranged a four-hour classified cyberthreat briefing for them near Palo Alto.
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It is unusual for anyone outside government to receive a classified briefing of such length, and the chairman of the Joint Chiefs of Staff even attended. This suggests a relationship in which Silicon Valley was hardly an ill-used underling. It is normal government protocol for subordinates to call on their superiors, and for the nation's highest-ranking military officer to fly across the country to attend the briefing implies a good deal of deference.

As more than one intelligence veteran has told me, the NSA has made itself completely dependent upon Silicon Valley for the technology necessary for it to do its mission. A tacit part of that mission is to keep the money flowing, and the agency is now helpless without contractors to implement that technology—about 70 percent of the agency's budget is spent on contracts. The NSA and the rest of the intelligence community are dependent upon high technology and the contractors who install, operate, and service it in exactly the same way the military is for the weapons systems it employs. The technology is so crucial—at least in the minds of senior officials and ambitious mid-level administrators, particularly since 9/11—that the entire American method of conducting warfare, intelligence, antiterrorism, and law enforcement has become predicated on it. All these sectors of the Deep State have become ensnared in the alluring
concept of “big data,” and information technology contractors are only too happy to sell them the gear to sort it out.