September 5, 2005 | 8:58 p.m. ET

The “city” of Louisiana (Keith Olbermann)

SECAUCUS — Secretary of Homeland Security Michael Chertoff said it all, starting his news briefing Saturday afternoon: “Louisiana is a city that is largely underwater…”

Well there’s your problem right there.

If ever a slip-of-the-tongue defined a government’s response to a crisis, this was it.

The seeming definition of our time and our leaders had been their insistence on slashing federal budgets for projects that might’ve saved New Orleans. The seeming characterization of our government that it was on vacation when the city was lost, and could barely tear itself away from commemorating V.J. Day and watching Monty Python’s Flying Circus, to at least pretend to get back to work. The seeming identification of these hapless bureaucrats: their pathetic use of the future tense in terms of relief they could’ve brought last Monday and Tuesday — like the President, whose statements have looked like they’re being transmitted to us by some kind of four-day tape-delay.

But no. The incompetence and the ludicrous prioritization will forever be symbolized by one gaffe by of the head of what is ironically called “The Department of Homeland Security”: “Louisiana is a city…”

Politician after politician — Republican and Democrat alike — has paraded before us, unwilling or unable to shut off the “I-Me” switch in their heads, condescendingly telling us about how moved they were or how devastated they were — congenitally incapable of telling the difference between the destruction of a city and the opening of a supermarket.

And as that sorry recital of self-absorption dragged on, I have resisted editorial comment. The focus needed to be on the efforts to save the stranded — even the internet’s meager powers were correctly devoted to telling the stories of the twin disasters, natural… and government-made.

But now, at least, it is has stopped getting exponentially worse in Mississippi and Alabama and New Orleans and Louisiana (the state, not the city). And, having given our leaders what we know now is the week or so they need to get their act together, that period of editorial silence I mentioned, should come to an end.

No one is suggesting that mayors or governors in the afflicted areas, nor the federal government, should be able to stop hurricanes. Lord knows, no one is suggesting that we should ever prioritize levee improvement for a below-sea-level city, ahead of $454 million worth of trophy bridges for the politicians of Alaska.

But, nationally, these are leaders who won re-election last year largely by portraying their opponents as incapable of keeping the country safe. These are leaders who regularly pressure the news media in this country to report the reopening of a school or a power station in Iraq, and defies its citizens not to stand up and cheer.
Yet they couldn’t even keep one school or power station from being devastated by infrastructure collapse in New Orleans — even though the government had heard all the “chatter” from the scientists and city planners and hurricane centers and some group whose purposes the government couldn’t quite discern… a group called The U.S. Army Corps of Engineers.

And most chillingly of all, this is the Law and Order and Terror government. It promised protection — or at least amelioration — against all threats: conventional, radiological, or biological.

It has just proved that it cannot save its citizens from a biological weapon called standing water.

Mr. Bush has now twice insisted that, “we are not satisfied,” with the response to the manifold tragedies along the Gulf Coast. I wonder which “we” he thinks he’s speaking for on this point. Perhaps it’s the administration, although we still don’t know where some of them are. Anybody seen the Vice President lately? The man whose message this time last year was, ‘I’ll Protect You, The Other Guy Will Let You Die’?

I don’t know which ‘we’ Mr. Bush meant.

For many of this country’s citizens, the mantra has been — as we were taught in Social Studies it should always be — whether or not I voted for this President — he is still my President. I suspect anybody who had to give him that benefit of the doubt stopped doing so last week.
I suspect a lot of his supporters, looking ahead to ’08, are wondering how they can distance themselves from the two words which will define his government — our government — “New Orleans.”

For him, it is a shame — in all senses of the word. A few changes of pronouns in there, and he might not have looked so much like a 21st Century Marie Antoinette. All that was needed was just a quick “I’m not satisfied with my government’s response.” Instead of hiding behind phrases like “no one could have foreseen,” had he only remembered Winston Churchill’s quote from the 1930′s. “The responsibility,” of government, Churchill told the British Parliament “for the public safety is absolute and requires no mandate. It is in fact, the prime object for which governments come into existence.”

In forgetting that, the current administration did not merely damage itself — it damaged our confidence in our ability to rely on whoever is in the White House.

As we emphasized to you here all last week, the realities of the region are such that New Orleans is going to be largely uninhabitable for a lot longer than anybody is yet willing to recognize. Lord knows when the last body will be found, or the last artifact of the levee break, dug up. Could be next March. Could be 2100. By then, in the muck and toxic mire of New Orleans, they may even find our government’s credibility.

Somewhere, in the City of Louisiana.

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“CardSystems Exposes 40 Million Identities” as a harbinger? Now that
we know more about the facts in this recent case, expect more to come.

Yes, public opinion and credit card companies can and will force
companies that process credit card data to increase their security.
However, how about the “acceptable risk” concept that underlies the
very security procedures of credit card companies themselves and
pervades their relationships with their parties? Do As I Say, Not As
I Do?

The dirty little secret of the credit card industry is that they are
very happy with 10% of credit card fraud, over the Internet or not.

In fact, if they would reduce fraud to _zero_ today, their revenue
would decrease as well as their profits. So, there is really no
incentive to reduce fraud. On the contrary, keeping the status quo is
just fine.

This is so because of insurance — up to a certain level, which is
well within the operational boundaries of course, a fraudulent
transaction does not go unpaid through VISA, American Express or
Mastercard servers. The transaction is fully paid, with its
insurance cost paid by the merchant and, ultimately, by the customer.

“Acceptable risk” has been for a long time an euphemism for that
business model that shifts the burden of fraud to the customer.

Thus, the credit card industry has successfully turned fraud into a
sale. This is the same attitude reported to me by a car manufacturer
representative when I was talking to him about simple techniques to
reduce car theft — to which he said: “A car stolen is a car sold.”
In fact, a car stolen will need replacement that will be provided by
insurance or by the customer working again to buy another car. While
the stolen car continues to generate revenue for the manufacturer in
service and parts.

Whenever we see continued fraud, we should be certain: the defrauded
is profiting from it. Because no company will accept a continued
loss without doing anything to reduce it. Arguments such as “we don’t
want to reduce the fraud level because it would cost more to reduce
the fraud than the fraud costs” are just a marketing way to say that
a fraud has become a sale.

Because fraud is an hemorrhage that adds up, while efforts to fix it
– if done correctly — are mostly an up front cost that is incurred
only once. So, to accept fraud debits is to accept that there is
also a credit that continuously compensates the debit. Which credit
ultimately flows from the customer — just like in car theft.

What is to blame? Not only the twisted ethics behind this attitude
but also that traditional security school of thought which focus on
risk, surveillance and insurance as the solution to security problems.

There is no consideration of what trust really would mean in terms of
bits and machines[*], no consideration that the insurance model of
security cannot scale in Internet volumes and cannot even be
ethically justifiable.

“A fraud is a sale” is the only outcome possible from using such
security school of thought. Also sometimes referred to as
“acceptable risk” — acceptable indeed, because it is paid for.

Regards,
Ed Gerck

[*] Unless the concept of trust in communication systems
is defined in terms of bits and machines, while also making
sense for humans, it really cannot be applied to e-commerce.
And there are some who use trust as a synonym for authorization.
This may work in a network, where a trusted user is a user
authorized by management to use some resources. But it does
not work across trust boundaries, or in the Internet, with no
common reporting point possible.

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