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From the Los Angeles Times

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The nest-egg myth

Nearly half of today's older Americans receive no income from assets such as stocks and savings accounts.

by Susan Jacoby

February 20, 2011

As the debate over the federal deficit heats up, Americans are going to hear a great deal about "greedy geezers" who are supposedly bankrupting the nation with Social Security and Medicare. Politicians will no doubt be more circumspect than former Wyoming Sen. Alan Simpson, who, as the Republican co-chairman of the federal deficit commission, described Social Security as a "milk cow with 310 million tits."

The myth underlying these attacks (including Simpson's misogynist bovine metaphor) is that most old people don't need their entitlements — that they are affluent pickpockets fleecing younger Americans.

This image of prosperous geezers and crones is just not accurate. The notion of an aging population well prepared to take care of itself — not only in its relatively healthy 60s and 70s, classified by sociologists as the "young old," but throughout the "old old" 80s and 90s — is a delusion that threatens to undo 75 years of social progress that began when President Franklin D. Roosevelt signed the Social Security Act in 1935.

No generation stands to lose more from this fantasy than baby boomers, whose oldest members turn 65 this year. Because of financial losses in what will surely be known to history as the Crash of 2008, many boomers — especially older ones with less time to recover — may enter retirement in a worse financial position than their parents. According to a report by the Center for Economic and Policy Research, a liberal Washington think tank, households headed by boomers between the ages of 55 and 65 lost about half of their wealth between 2004 and 2009 as a result of the real estate collapse and the shrinkage of 401(k) retirement accounts. Americans at the lower end of the socioeconomic scale were the hardest hit, because for most lower- and middle-income families, their homes were their only assets.

Furthermore, only half of working Americans — the wealthier half with employers that match contributions — even have tax-sheltered retirement accounts. The average value of these accounts, by the way, was only about $45,500 before the crash — hardly a lavish retirement nest egg for boomers expected to live beyond 85 in unprecedented numbers. In just 20 years, the over-85 population is expected to number more than 8.5 million.

The archetype of the greedy geezer is based partly on a misconception about today's oldest Americans: the World War II generation. The frequently repeated statistic that 75% of all assets are owned by people over 65 is utterly misleading, because those assets are held in a minority of very rich hands. Nearly half of older Americans receive no income — none — from assets such as stocks and savings accounts. Of those who do, half receive less than $2,000 a year.

Three-fourths of those over 65, according to a report by the nonpartisan Congressional Research Service, have annual incomes, including Social Security, of less than $34,000. Furthermore, household income drops precipitously with every decade, and most of the poor in their 80s and 90s are women, who — unless their husbands possessed vast wealth — are very likely to become poorer when they are widowed.

It has long been assumed that boomer women will be in a better economic position than their mothers, because more of them held paying jobs. But that assumption may be a fallacy, given the disappearance of traditional fixed pensions during the last three decades and the interrupted job history of many working mothers, which reduces Social Security income.

One major obstacle to realistic government and individual planning is incessant propaganda, much of it dispensed by boomers themselves, claiming that we are on the threshold of a "new old age" radically different from old age in previous generations. This spirit was embodied by a panel on aging, titled "90 Is the New 50," at the 2008 World Science Festival held in New York City.

In the "forever young" fantasy, boomers will be immune to the worst vicissitudes of old age thanks to medical breakthroughs and their own clean-living habits. The truth: Half of Americans who live beyond 85 will suffer from dementia, of which Alzheimer's is the leading cause, and half will spend time in a nursing home before they die. One can always hope, as I do, for medical breakthroughs to treat the worst scourges of old age — especially Alzheimer's — but they are more likely to arrive in time for the children or grandchildren of the boomers than for adults already in their 50s and 60s.

Furthermore, hope is not a plan of action. The saving of Social Security and Medicare for the boomer generation — and generations to follow — will require nothing less than a reworking of the intergenerational contract on which these programs were based. We now have a system (regardless of the ultimate fate of the decidedly modest healthcare reform law in the courts) in which people under 65 spend ever-increasing sums on private health insurance and only the old enjoy government-financed care. At the height of the debate in 2009, a national poll showed that two-thirds of Americans over 65 opposed universal healthcare — except for themselves.

This does sound like greedy geezers talking, but I suspect that it was fear speaking — the fear that better healthcare for younger Americans would mean worse care for the old. What's wrong is not that the old have too much access to healthcare but that the young have too little.

The post-1935 intergenerational social contract, which depends on the willingness of young workers to pay for the dependent old, may crumble in the next 20 years unless the healthcare needs of young Americans are also addressed. Reworking the contract, and the programs that depend on it, will require aging boomers to recognize the financial stresses of younger workers, and the young to tell mean-spirited public figures like Simpson that Social Security is not a luxury but a permanent responsibility for all Americans of all generations.

Finally, a decent old age requires more than healthcare. Both higher taxes and more personal saving will be needed to support longer lives, however unacceptable that dual reality may be to political purveyors of unreason. If we are not going to kill Granny, we must support many more boomer Grannies. Or we can numb our brains with the delusion that 90 really will become the new 50 and that boomers will be able to work (and shop) till they drop.

Then we can just do nothing until time runs out and the reduction of poverty among the old — one of the great accomplishments of America's 20th century — is undone by our feckless fantasies.

http://www.latimes.com/news/opinion/commentary/la-oe-jacoby-aging-boomers-20110220,0,5199236,print.story

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From the New York Times

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Hiding Details of Dubious Deal, U.S. Invokes National Security

WASHINGTON — For eight years, government officials turned to Dennis Montgomery, a California computer programmer, for eye-popping technology that he said could catch terrorists. Now, federal officials want nothing to do with him and are going to extraordinary lengths to ensure that his dealings with Washington stay secret.

The Justice Department, which in the last few months has gotten protective orders from two federal judges keeping details of the technology out of court, says it is guarding state secrets that would threaten national security if disclosed. But others involved in the case say that what the government is trying to avoid is public embarrassment over evidence that Mr. Montgomery bamboozled federal officials.

A onetime biomedical technician with a penchant for gambling, Mr. Montgomery is at the center of a tale that features terrorism scares, secret White House briefings, backing from prominent Republicans, backdoor deal-making and fantastic-sounding computer technology.

Interviews with more than two dozen current and former officials and business associates and a review of documents show that Mr. Montgomery and his associates received more than $20 million in government contracts by claiming that software he had developed could help stop Al Qaeda's next attack on the United States. But the technology appears to have been a hoax, and a series of government agencies, including the Central Intelligence Agency and the Air Force, repeatedly missed the warning signs, the records and interviews show.

Mr. Montgomery's former lawyer, Michael Flynn — who now describes Mr. Montgomery as a “con man” — says he believes that the administration has been shutting off scrutiny of Mr. Montgomery's business for fear of revealing that the government has been duped.

“The Justice Department is trying to cover this up,” Mr. Flynn said. “If this unravels, all of the evidence, all of the phony terror alerts and all the embarrassment comes up publicly, too. The government knew this technology was bogus, but these guys got paid millions for it.”

Justice Department officials declined to discuss the government's dealings with Mr. Montgomery, 57, who is in bankruptcy and living outside Palm Springs, Calif. Mr. Montgomery is about to go on trial in Las Vegas on unrelated charges of trying to pass $1.8 million in bad checks at casinos, but he has not been charged with wrongdoing in the federal contracts, nor has the government tried to get back any of the money it paid. He and his current lawyer declined to comment.

The software he patented — which he claimed, among other things, could find terrorist plots hidden in broadcasts of the Arab network Al Jazeera ; identify terrorists from Predator drone videos; and detect noise from hostile submarines — prompted an international false alarm that led President George W. Bush to order airliners to turn around over the Atlantic Ocean in 2003.

The software led to dead ends in connection with a 2006 terrorism plot in Britain. And they were used by counterterrorism officials to respond to a bogus Somali terrorism plot on the day of President Obama 's inauguration, according to previously undisclosed documents.

‘It Wasn't Real'

“Dennis would always say, ‘My technology is real, and it's worth a fortune,' ” recounted Steve Crisman, a filmmaker who oversaw business operations for Mr. Montgomery and a partner until a few years ago. “In the end, I'm convinced it wasn't real.”

Government officials, with billions of dollars in new counterterrorism financing after Sept. 11, eagerly embraced the promise of new tools against militants.

C.I.A. officials, though, came to believe that Mr. Montgomery's technology was fake in 2003, but their conclusions apparently were not relayed to the military's Special Operations Command, which had contracted with his firm. In 2006, F.B.I. investigators were told by co-workers of Mr. Montgomery that he had repeatedly doctored test results at presentations for government officials. But Mr. Montgomery still landed more business.

In 2009, the Air Force approved a $3 million deal for his technology, even though a contracting officer acknowledged that other agencies were skeptical about the software, according to e-mails obtained by The New York Times.

Hints of fraud by Mr. Montgomery, previously raised by Bloomberg Markets and Playboy, provide a cautionary tale about the pitfalls of government contracting. A Pentagon study in January found that it had paid $285 billion in three years to more than 120 contractors accused of fraud or wrongdoing.

“We've seen so many folks with a really great idea, who truly believe their technology is a breakthrough, but it turns out not to be,” said Gen. Victor E. Renuart Jr. of the Air Force, who retired last year as the commander of the military's Northern Command. Mr. Montgomery described himself a few years ago in a sworn court statement as a patriotic scientist who gave the government his software “to stop terrorist attacks and save American lives.” His alliance with the government, at least, would prove a boon to a small company, eTreppid Technologies, that he helped found in 1998.

He and his partner — a Nevada investor, Warren Trepp, who had been a top trader for the junk-bond king Michael Milken — hoped to colorize movies by using a technology Mr. Montgomery claimed he had invented that identified patterns and isolated images. Hollywood had little interest, but in 2002, the company found other customers.

With the help of Representative Jim Gibbons, a Republican who would become Nevada's governor and was a longtime friend of Mr. Trepp's, the company won the attention of intelligence officials in Washington. It did so with a remarkable claim: Mr. Montgomery had found coded messages hidden in broadcasts by Al Jazeera, and his technology could decipher them to identify specific threats.

The software so excited C.I.A. officials that, for a few months at least, it was considered “the most important, most sensitive” intelligence tool the agency had, according to a former agency official, who like several others would speak only on the condition of anonymity because the technology was classified. ETreppid was soon awarded almost $10 million in contracts with the military's Special Operations Command and the Air Force, which were interested in software that Mr. Montgomery promised could identify human and other targets from videos on Predator drones.

In December 2003, Mr. Montgomery reported alarming news: hidden in the crawl bars broadcast by Al Jazeera, someone had planted information about specific American-bound flights from Britain, France and Mexico that were hijacking targets.

C.I.A. officials rushed the information to Mr. Bush, who ordered those flights to be turned around or grounded before they could enter American airspace.

“The intelligence people were telling us this was real and credible, and we had to do something to act on it,” recalled Asa Hutchinson, who oversaw federal aviation safety at the time. Senior administration officials even talked about shooting down planes identified as targets because they feared that supposed hijackers would use the planes to attack the United States, according to a former senior intelligence official who was at a meeting where the idea was discussed. The official later called the idea of firing on the planes “crazy.”

French officials, upset that their planes were being grounded, commissioned a secret study concluding that the technology was a fabrication. Presented with the findings soon after the 2003 episode, Bush administration officials began to suspect that “we got played,” a former counterterrorism official said.

The C.I.A. never did an assessment to determine how a ruse had turned into a full-blown international incident, officials said, nor was anyone held accountable. In fact, agency officials who oversaw the technology directorate — including Donald Kerr, who helped persuade George J. Tenet, then the director of central intelligence, that the software was credible — were promoted, former officials said. “Nobody was blamed,” a former C.I.A. official said. “They acted like it never happened.”

After a bitter falling out between Mr. Montgomery and Mr. Trepp in 2006 led to a series of lawsuits, the F.B.I. and the Air Force sent investigators to eTreppid to look into accusations that Mr. Montgomery had stolen digital data from the company's systems. In interviews, several employees claimed that Mr. Montgomery had manipulated tests in demonstrations with military officials to make it appear that his video recognition software had worked, according to government memorandums. The investigation collapsed, though, when a judge ruled that the F.B.I. had conducted an improper search of his home.

Software and Secrets

The litigation worried intelligence officials. The Bush administration declared that some classified details about the use of Mr. Montgomery's software were a “state secret” that could cause grave harm if disclosed in court. In 2008, the government spent three days “scrubbing” the home computers of Mr. Montgomery's lawyer of all references to the technology. And this past fall, federal judges in Montana and Nevada who are overseeing several of the lawsuits issued protective orders shielding certain classified material.

The secrecy was so great that at a deposition Mr. Montgomery gave in November, two government officials showed up to monitor the questioning but refused to give their full names or the agencies they worked for.

Years of legal wrangling did not deter Mr. Montgomery from passing supposed intelligence to the government, according to intelligence officials, including an assertion in 2006 that his software was able to identify some of the men suspected of trying to plant liquid bombs on planes in Britain — a claim immediately disputed by United States intelligence officials. And he soon found a new backer: Edra Blixseth, a onetime billionaire who with her former husband had run the Yellowstone Club in Montana.

Hoping to win more government money, Ms. Blixseth turned to some influential friends, like Jack Kemp, the former New York congressman and Republican vice-presidential nominee, and Conrad Burns, then a Republican senator from Montana. They became minority stakeholders in the venture, called Blxware.

New Pitches

In an interview, Mr. Burns recalled how impressed he was by a video presentation that Mr. Montgomery gave to a cable company. “He talked a hell of a game,” the former senator said.

Mr. Kemp, meanwhile, used his friendship with Vice President Dick Cheney to set up a meeting in 2006 at which Mr. Kemp, Mr. Montgomery and Ms. Blixseth met with a top Cheney adviser, Samantha Ravich, to talk about expanding the government's use of the Blxware software, officials said. She was noncommittal.

Mr. Flynn, who was still Mr. Montgomery's lawyer, sent an angry letter to Mr. Cheney in May 2007. He accused the White House of abandoning a tool shown to “save lives.” (After a falling out with Mr. Montgomery, Mr. Flynn represents another party in one of the lawsuits.)

But Mr. Montgomery's company still had an ally at the Air Force, which in late 2008 began negotiating a $3 million contract with Blxware.

In e-mails to Mr. Montgomery and other company officials, an Air Force contracting officer, Joseph Liberatore, described himself as one of the “believers,” despite skepticism from the C.I.A. and problems with the no-bid contract.

If other agencies examined the deal, he said in a December 2008 e-mail, “we are all toast.”

“Honestly I do not care about being fired,” Mr. Liberatore wrote, but he said he did care about “moving the effort forward — we are too close.” (The Air Force declined to make Mr. Liberatore available for comment.)

The day after Mr. Obama's inauguration, Mr. Liberatore wrote that government officials were thanking Mr. Montgomery's company for its support. The Air Force appears to have used his technology to try to identify the Somalis it believed were plotting to disrupt the inauguration, but within days, intelligence officials publicly stated that the threat had never existed. In May 2009, the Air Force canceled the company's contract because it had failed to meet its expectations.

Mr. Montgomery is not saying much these days. At his deposition in November, when he was asked if his software was a “complete fraud,” he answered, “I'm going to assert my right under the Fifth Amendment.”

http://www.nytimes.com/2011/02/20/us/politics/20data.html?ref=us

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New Hacking Tools Pose Bigger Threats to Wi-Fi Users

You may think the only people capable of snooping on your Internet activity are government intelligence agents or possibly a talented teenage hacker holed up in his parents' basement. But some simple software lets just about anyone sitting next to you at your local coffee shop watch you browse the Web and even assume your identity online.

“Like it or not, we are now living in a cyberpunk novel,” said Darren Kitchen, a systems administrator for an aerospace company in Richmond, Calif., and the host of Hak5, a video podcast about computer hacking and security. “When people find out how trivial and easy it is to see and even modify what you do online, they are shocked.”

Until recently, only determined and knowledgeable hackers with fancy tools and lots of time on their hands could spy while you used your laptop or smartphone at Wi-Fi hot spots. But a free program called Firesheep, released in October, has made it simple to see what other users of an unsecured Wi-Fi network are doing and then log on as them at the sites they visited.

Without issuing any warnings of the possible threat, Web site administrators have since been scrambling to provide added protections.

“I released Firesheep to show that a core and widespread issue in Web site security is being ignored,” said Eric Butler, a freelance software developer in Seattle who created the program. “It points out the lack of end-to-end encryption.”

What he means is that while the password you initially enter on Web sites like Facebook, Twitter, Flickr, Amazon, eBay and The New York Times is encrypted, the Web browser's cookie, a bit of code that that identifies your computer, your settings on the site or other private information, is often not encrypted. Firesheep grabs that cookie, allowing nosy or malicious users to, in essence, be you on the site and have full access to your account.

More than a million people have downloaded the program in the last three months (including this reporter, who is not exactly a computer genius). And it is easy to use.

The only sites that are safe from snoopers are those that employ the cryptographic protocol transport layer security or its predecessor, secure sockets layer, throughout your session. PayPal and many banks do this, but a startling number of sites that people trust to safeguard their privacy do not. You know you are shielded from prying eyes if a little lock appears in the corner of your browser or the Web address starts with “https” rather than “http.”

“The usual reason Web sites give for not encrypting all communication is that it will slow down the site and would be a huge engineering expense,” said Chris Palmer, technology director at the Electronic Frontier Foundation, an electronic rights advocacy group based in San Francisco. “Yes, there are operational hurdles, but they are solvable.”

Indeed, Gmail made end-to-end encryption its default mode in January 2010. Facebook began to offer the same protection as an opt-in security feature last month, though it is so far available only to a small percentage of users and has limitations. For example, it doesn't work with many third-party applications.

“It's worth noting that Facebook took this step, but it's too early to congratulate them,” said Mr. Butler, who is frustrated that “https” is not the site's default setting. “Most people aren't going to know about it or won't think it's important or won't want to use it when they find out that it disables major applications.”

Joe Sullivan, chief security officer at Facebook, said the company was engaged in a “deliberative rollout process,” to access and address any unforeseen difficulties. “We hope to have it available for all users in the next several weeks,” he said, adding that the company was also working to address problems with third-party applications and to make “https” the default setting.

Many Web sites offer some support for encryption via “https,” but they make it difficult to use. To address these problems, the Electronic Frontier Foundation in collaboration with the Tor Project, another group concerned with Internet privacy, released in June an add-on to the browser Firefox, called Https Everywhere. The extension, which can be downloaded at eff.org/https-everywhere, makes “https” the stubbornly unchangeable default on all sites that support it.

Since not all Web sites have “https” capability, Bill Pennington, chief strategy officer with the Web site risk management firm WhiteHat Security in Santa Clara, Calif., said: “I tell people that if you're doing things with sensitive data, don't do it at a Wi-Fi hot spot. Do it at home.”

But home wireless networks may not be all that safe either, because of free and widely available Wi-Fi cracking programs like Gerix WiFi Cracker, Aircrack-ng and Wifite. The programs work by faking legitimate user activity to collect a series of so-called weak keys or clues to the password. The process is wholly automated, said Mr. Kitchen at Hak5, allowing even techno-ignoramuses to recover a wireless router's password in a matter of seconds. “I've yet to find a WEP-protected network not susceptible to this kind of attack,” Mr. Kitchen said.

A WEP-encrypted password (for wired equivalent privacy) is not as strong as a WPA (or Wi-Fi protected access) password, so it's best to use a WPA password instead. Even so, hackers can use the same free software programs to get on WPA password-protected networks as well. It just takes much longer (think weeks) and more computer expertise.

Using such programs along with high-powered Wi-Fi antennas that cost less than $90, hackers can pull in signals from home networks two to three miles away. There are also some computerized cracking devices with built-in antennas on the market, like WifiRobin ($156). But experts said they were not as fast or effective as the latest free cracking programs, because the devices worked only on WEP-protected networks.

To protect yourself, changing the Service Set Identifier or SSID of your wireless network from the default name of your router (like Linksys or Netgear) to something less predictable helps, as does choosing a lengthy and complicated alphanumeric password.

Setting up a virtual private network, or V.P.N., which encrypts all communications you transmit wirelessly whether on your home network or at a hot spot, is even more secure. The data looks like gibberish to a snooper as it travels from your computer to a secure server before it is blasted onto the Internet.

Popular V.P.N. providers include VyperVPN, HotSpotVPN and LogMeIn Hamachi. Some are free; others are as much as $18 a month, depending on how much data is encrypted. Free versions tend to encrypt only Web activity and not e-mail exchanges.

However, Mr. Palmer at the Electronic Frontier Foundation blames poorly designed Web sites, not vulnerable Wi-Fi connections, for security lapses. “Many popular sites were not designed for security from the beginning, and now we are suffering the consequences,” he said. “People need to demand ‘https' so Web sites will do the painful integration work that needs to be done.”

http://www.nytimes.com/2011/02/17/technology/personaltech/17basics.html?ref=general&src=me&pagewanted=print

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From Google News

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California School District Uses GPS to Track Truant Students

February 19, 2011

by David Murphy

Not even Ferris Bueller himself could have gotten around this one: A six-week pilot program by California's Anaheim Union High School District is testing the use of technology to combat tardiness amongst the district's seventh- and eighth-grade population.

How it works is fairly simple. Students with four or more unexcused absences in a year—approximately 75 are enrolled in the Anaheim test--are given handheld GPS devices instead of detentions or prosecutions. To make sure that said students are in school when they should be, the students are required to check in using the devices during five preset intervals: When they leave for school in the morning, when they arrive at school, lunchtime, when they leave school, and at 8 p.m. each day.

And if that's not enough, students in the program also receive a phone call each and every day to tell them that it's time to get up and get to school. An adult coach also calls the students three times per week to check up and discuss different methods the students can employ to ensure that they're where they should be at any given point during the day.

"The idea is for this not to feel like a punishment, but an intervention to help them develop better habits and get to school," said Miller Sylvan, regional director for AIM Truancy Solutions, in an interview with The Orange County Register.

As one would expect, the GPS devices themselves don't come cheap. They cost around $300 to $400 per device, and the entire six-week program itself would set the district back $18,000—or $8 per day, per affected student. In this case, however, a state grant is paying for the program.

In addition, an absent student sets the district back approximately $35 per day—meaning that the GPS program will save the school district money if it can achieve the same success rate that the program has seen in similar pilots for other districts. Attendance rates, in total, allegedly jumped from an average of 77 percent to 95 percent during these six-week trials in other districts, with only slight dips in attendance following the programs' conclusions.

Truant students in the Anaheim Union High School District can face time in juvenile hall if prosecuted, and their parents can face fines of up to $2,000 for their children's' absences.

http://www.pcmag.com/article2/0,2817,2380640,00.asp

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Loughner trial moved to San Diego: Federal hearing on release of new photos

Legal experts say the venue change could mean Loughner is less likely to be sentenced to death since California is considered to be less conservative than Arizona.

It was on Jan. 8, 2011, outside a supermarket in Tucson, Arizona, when Loughner went on a mass shooting spree killing six people, wounding 13 in an assassination attempt on U.S. Rep. Gabrielle Giffords who survived after being shot at point blank range to the head.

Loughner has been charged in federal court in Arizona with five counts of murder and attempted murder. State charges have yet to be filed.

A federal judge heard arguments on Friday in San Diego, whether federal booking photos would be released to the news media who has asked the photos be released by the federal government under the U.S. Freedom of Information Act.

It turns out that the “mug shot” photo of Loughner that was released to the public of him with his head shaven bald, looking wild-eyed and smiling broadly.was not his official post-arrest booking photo.

The newer photos taken by federal authorities, not the county sheriff's department, has yet to be released to the public.

The argument from Loughner's attorney is that the released of the formal federal booking photos, just one month after the shooting, would violate Loughner's privacy rights and again jeopardize his right to a fair trial.

http://www.examiner.com/people-the-news-in-national/loughner-trial-moved-to-san-diego-federal-hearing-on-release-of-new-photos

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