Will Edward Snowden be given a fair hearing?

Far from committing an act of treason, as several top US lawmakers have suggested, by all appearances the NSA whistleblower has done a public service.

We owe a lot to Edward Snowden, the former Central Intelligence Agency computer technician who exposed large-scale surveillance efforts within the United States and worldwide. 



He’s accomplished what the US Congress could not do and the federal courts have so far refused to do. Far from committing an act of treason, as several top US lawmakers have suggested, by all appearances he’s done a public service.



Thanks to him, we now know about the secret court order compelling the telecommunications company Verizon to disclose to the National Security Agency (NSA), on an “ongoing daily basis”, information on all telephone calls it handles.  We also now know about the secret NSA programme Prism, which allows direct access to information in the servers of Microsoft, Yahoo, Google, Facebook, YouTube, Skype and Apple, among other companies. And we know more about the ways the NSA is able, through its “Boundless Informant” initiative, to collate the information it mines from these efforts. 



These disclosures reveal two trends in the United States’ approach to intelligence - starting with the Bush Administration and, we now know, continued and augmented on President Obama’s watch. 



First, when given the option of broad surveillance powers at home and abroad, US intelligence agencies have taken that option and pushed it as far as possible.  

Why be constrained by the quaint concepts of following individual leads and demonstrating probable cause when they can instead sift through millions of telephone logs and plug directly into the servers of the email and social networking platforms that almost everybody uses? 



This approach is hardly surprising, for any number of reasons. Surely one significant incentive to adopt it is that the courts have held that disclosure of call logs, even in their entirety, need not meet the usual requirements for a warrant.



It is true that obtaining “telephony metadata” - records of calls placed from one phone to another, when and for how long, and, in the case of mobile telephones, through which cell towers - isn’t quite the same as eavesdropping on individual communications. But the courts appear not to appreciate just how much can be gleaned from such data. Especially if cross-referenced with other sources of data, an analysis of call logs can produce a scarily accurate picture of who associates with whom (and at what level of intimacy), how they spend their free time, what health conditions they may have, what their political views are likely to be, and other details of their private lives.



Second, obvious for some time, is the trend of state secrecy gone mad.



The sweeping collection of phone “metadata” was made possible by amendments in 2008 to the Foreign Intelligence Surveillance Act (FISA) which exempt such surveillance from any meaningful oversight. Under the amendments, the government has no obligation to reveal whose communications it intends to monitor, and the FISA court has no role in reviewing how the government is actually using the information it gathers.  Most remarkably, even if the court finds the government’s procedures deficient, the government can disregard those findings and continue surveillance while it appeals the court’s decision.



The American Civil Liberties Union challenged the law’s constitutionality on behalf of Amnesty International, human rights lawyers, and other organizations. Dismissing the case last year, the US Supreme Court said that Amnesty International and the other groups couldn’t show that we were likely to be subject to surveillance. And how could we? Surveillance and the court orders that authorise it are secret.



President Obama said last week that Congressional oversight is the best guarantee that Americans aren’t being spied on. As for the rest of the world, well, we’ve been on notice for some time that we’re fair game
.

And even with the best will in the world, Congress can’t oversee what it isn’t told about. As two US senators observed in a letter last October, “the intelligence community has stated repeatedly that it is not possible to provide even a rough estimate of how many American communications have been collected under the FISA Amendments Act, and has even declined to estimate the scale of this collection”.



In fact, in March, one month before the Verizon disclosure order took effect, James Clapper, the director of national intelligence, denied collecting “any type of data” on large numbers of US citizens. He’s since characterised his answer as “the most truthful, or least untruthful,” response. 



Even before the US justice department filed criminal charges against Snowden, the United Kingdom had told airlines to deny him boarding on any flight to any country, lest he seek to travel to or through London in an effort to seek asylum outside Hong Kong.



The charges filed again Snowden include theft of government property and espionage. It has also been reported that US authorities have asked Hong Kong to detain him on a provisional arrest warrant. It is also said that an attempt to seek his extradition to the US is being prepared. 



It would be a miscarriage of justice if Snowden isn’t allowed to put forward a public interest defence to the charges. His stated motive was to inform the public of what the US is doing in their name. He’s said that he reviewed the documents prior to disclosure in order to ensure that he didn’t put anybody at risk. And there’s no question that the programmes he exposed are actually matters of public interest. 


If Hong Kong receives a request for Snowden’s extradition, it should insist not only that the charges presented have equivalents in domestic law but also that the public interest defence be available upon extradition. If it’s not, the extradition request should be refused. And if Snowden does seek asylum, whether in Hong Kong or anywhere else, he should be given a fair hearing. 


Michael Bochenek is Amnesty International's Director of Law and Policy

A poster showing Edward Snowden. Photograph: Getty Images
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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?