The Invisible Wall of Separation

One of the things I like to to do is debunk the imaginary "invisible wall" that exists only in the minds of Libertarians between the government and the so-called "private" sector, which is a load of hogwash.

Last year there were a couple of good articles about all the money that the government poured into the current private-sector savior du jour: Tesla Motors. According to the latest tech hyperbole, all the action is in building a better battery, and once that happens the non-carbon electric economy will take off and save the world - PV, electric cars, etc. Elon Musk has taken over Steve Jobs' role as the Savior of Capitalism:

In 2009, as the financial crisis raged and General Motors and Chrysler plunged toward bankruptcy, Tesla Motors faced a seemingly impossible task: raising half a billion dollars to build an electric-car factory. Tesla had just staggered through a year of layoffs, canceled orders, and record losses. Then suddenly, salvation. The U.S. Department of Energy offered to lend the company $465 million at rock-bottom interest rates.

Four years later, Tesla Motors offers a remarkable example of how a well-timed government investment in the right company can pay off. Every week, 400 all-electric Model S sedans roll out of Tesla’s factory in Fremont, Calif., which the government’s loan financed.

Tesla Is Worse Than Solyndra (Slate)

And all the oil that has been liberated by the "private sector" through fracking was only made possible by the department of energy. Even Forbes, whose goal is always to downplay the role the government plays in the "private sector" to maintain the illusion that "heroic entrepreneurs" are the sole source of all prosperity and government just a stumbling block, has to admit a government role:

It’s one thing to note that federal research programs helped unlock fracking technology. It’s quite another to use fracking’s success to justify unqualified federal support for energy development programs. Funding the Eastern Gas Shales Project, for example, is quite different that setting mandating ethanol production levels. The government’s role in fracking’s development was important, but not so important that it eclipses the effort and investment of private industry. In fact, fracking is an example of the proper balance between government support for fledging technology and private industry’s development of it.

It wasn’t about “picking winners,” but fostering them. By reducing the cost of early-stage research, the government made it easier for Mitchell to make the technology commercially viable. Even then, it took almost two decades and cost him millions of his own company’s money.

How much did the feds really help with fracking? According to Steward, who was involved with Mitchell’s program from the beginning: “George probably could have done it without the government. The government would not have done it without George.”

How Much Did the Feds Really Help with Fracking? (Forbes)Nice backpedalling and equivocating there. I'm guessing Mitchell will conveniently forget the help from government when it comes time to pay his taxes.

Here's another example, courtesy of the Tea Party:

During the last presidential campaign, a recurring theme was that of independence from government support, a claim made proudly to counteract Obama's perceived "socialist" tendencies.

This past week, one of the rebuttals to Obama's State of the Union address was given by Joni Ernst (R-Iowa), who proudly described how she wore plastic bread bags over her shoes as a mark of her family's humble roots and ability to live within their means.  What she conveniently left out was her family's acceptance of federal farm subsidies:

    The truth about her family’s farm roots and living within one’s means, however, is more complex. Relatives of Ernst (née: Culver), based in Red Oak, Iowa (population: 5,568) have received over $460,000 in farm subsidies between 1995 and 2009. Ernst’s father, Richard Culver, was given $14,705 in conservation payments and $23,690 in commodity subsidies by the federal government–with all but twelve dollars allocated for corn support. Richard’s brother, Dallas Culver, benefited from $367,141 in federal agricultural aid, with over $250,000 geared toward corn subsidies.

"We built this" - redux (TYWKIWDBI)

And now Nafeez Ahmed has published a blockbuster piece documenting all the department of defense funding that let Google (and others) to get off the ground. This paragraph in particular raised my eyebrows:

In 1989, Richard O’Neill, then a US Navy cryptologist, wrote a paper for the US Naval War College, ‘Toward a methodology for perception management.’ In his book, Future Wars, Col. John Alexander, then a senior officer in the US Army’s Intelligence and Security Command (INSCOM), records that O’Neill’s paper for the first time outlined a strategy for “perception management” as part of information warfare (IW). O’Neill’s proposed strategy identified three categories of targets for IW: adversaries, so they believe they are vulnerable; potential partners, “so they perceive the cause [of war] as just”; and finally, civilian populations and the political leadership so they “perceive the cost as worth the effort.” A secret briefing based on O’Neill’s work “made its way to the top leadership” at DoD. “They acknowledged that O’Neill was right and told him to bury it.

Except the DoD didn’t bury it. Around 1994, the Highlands Group was founded by O’Neill as an official Pentagon project at the appointment of Bill Clinton’s then defense secretary William Perry — who went on to join SAIC’s board of directors after retiring from government in 2003.

This Highlands Group and Forum seems to run through the narrative. It proves that Silicon Valley is completely, totally, utterly in bed with the government, the Department of Defense, and the Deep State. It's a long way from the vision articulated by hippies in the Bay Area where computers and cybernetics would bring about utopia:

Thuraisingham’s account therefore demonstrates that the CIA-NSA-MDDS program was not only funding Brin throughout his work with Larry Page developing Google, but that senior US intelligence representatives including a CIA official oversaw the evolution of Google in this pre-launch phase, all the way until the company was ready to be officially founded. Google, then, had been enabled with a “significant” amount of seed-funding and oversight from the Pentagon: namely, the CIA, NSA, and DARPA.

****

The Xerox Palo Alto Research Center (PARC) was another contractor among 26 companies (also including SAIC) that received million dollar contracts from DARPA (the specific quantities remained classified) under Poindexter, to push forward the TIA surveillance program in 2002 onwards. The research included “behaviour-based profiling,” “automated detection, identification and tracking” of terrorist activity, among other data-analyzing projects. At this time, PARC’s director and chief scientist was John Seely Brown. Both Brown and Poindexter were Pentagon Highlands Forum participants — Brown on a regular basis until recently.

****

Total participants in the DoD’s Highlands Forum number over a thousand, although sessions largely consist of small closed workshop style gatherings of maximum 25–30 people, bringing together experts and officials depending on the subject. Delegates have included senior personnel from SAIC and Booz Allen Hamilton, RAND Corp., Cisco, Human Genome Sciences, eBay, PayPal, IBM, Google, Microsoft, AT&T, the BBC, Disney, General Electric, Enron, among innumerable others; Democrat and Republican members of Congress and the Senate; senior executives from the US energy industry such as Daniel Yergin of IHS Cambridge Energy Research Associates; and key people involved in both sides of presidential campaigns.

[...]

In sum, many of Google’s most senior executives are affiliated with the Pentagon Highlands Forum, which throughout the period of Google’s growth over the last decade, has surfaced repeatedly as a connecting and convening force. The US intelligence community’s incubation of Google from inception occurred through a combination of direct sponsorship and informal networks of financial influence, themselves closely aligned with Pentagon interests.

The Highlands Forum itself has used the informal relationship building of such private networks to bring together defense and industry sectors, enabling the fusion of corporate and military interests in expanding the covert surveillance apparatus in the name of national security. The power wielded by the shadow network represented in the Forum can, however, be gauged most clearly from its impact during the Bush administration, when it played a direct role in literally writing the strategies and doctrines behind US efforts to achieve ‘information superiority.’

How the CIA made Google (Medium) It's a long article in two parts, and well-worth reading in full.



Government, not the Private Sector, Leads Innovation (Naked Capitalism)

There's no more separation between government and business in the U.S. than between salt and water in the ocean.