Building a Better Beast : "Homeland Security" in the US and the PRC

Made in the USA: When Soviet dissident Vladimir Bukovsky was arrested by the KGB about 40 years ago, his guards told him the handcuffs he was wearing were made in America. US investment capital is helping China's thuggish gerontocracy keep its rising entrepreneurial population under surveillance.


Let it not be said that the disastrous and unjustifiable Iraq war has failed to yield commercial spin-offs.

Just as the first Gulf War famously prompted the Chinese General Staff to begin a crash modernization of the People's Liberation Army, the garrison state technology on display in the ongoing occupation of Iraq has inspired Lin Jianghuai, the 38-year-old tech tycoon heading China Public Security Technology, Inc -- a key contractor for the Ministry of Public Security (MSP), Beijing's version of the Department of Homeland Security.

Lin amassed a considerable fortune manufacturing a key component for DVD players. As he followed the progress of the Iraq war, Lin was impressed with the police-oriented hardware deployed by occupation troops, such as the HIIDE (Hand-held Interagency Identity Detection Equipment) system, which is simiar to the Mobilisa "Sentry" identity check device described in this space some months ago.

"I really felt strongly that the police [in China] would absolutely benefit from such technology," Lin recalls. "Bush helped me get my vision."

That's our Bush: Inspiring tyrants from Harare to Beijing.

In pursuit of that "vision," Lin purchased an undistinguished e-commerce business, fused it to a minuscule publicly traded Florida printing company via a "reverse merger," and then renamed the consolidated enterprise "China Public Security," or CPS. Currently traded only in limited fashion, CPS will be traded on the NASDAQ next year, if Lin's ambitions come to fruition. There's no denying that it is a growth stock.

Within a very short time of its creation, CPS attracted capital from two large investment funds in Plano, Texas: Pinnacle Fund and Pinnacle China Fund. Also on board were Roth Capital Partners of Newport Beach, California, New York's Oppenheimer & Company, and First Asia Finance Group of Hong Kong.

China's Ministry of Public Security then awarded Lin's company a contract for developing and deploying a pilot hi-tech surveillance program in Shenzen, a city next to Hong Kong that serves as a computer manufacturing center. At the center of CPS's surveillance system is a "residency card," which is very close kindred to the emerging REAL ID system here in the US.

The computer-readable chip in the Shenzen identity card, reports the New York Times, "will include not just the citizen's name and address but also work history, educational background, religion, ethnicity, police record, medical insurance status and landlord's phone number. Even personal reproductive history will be included, for enforcement of China's controversial `one child' policy. Plans are being studied to add credit histories, subway travel payments and small purchases charged to the card."

If the State objects to any element of the individual's life and background, as documented in the card, that individual will not be able to earn a living or participate in the economy.

This system is being described by Chinese authorities as a "pilot program" for a future nation-wide human inventory control apparatus. I can't help but suspect that it's likewise intended to provide a shakedown for the deployment of a very similar system in our own Homeland Security State.

The Pinnacle Fund, as it happens, is a significant investor in US Homeland Security contractors, among them GVI Security Solutions, Inc, which specializes in large-scale surveillance. Not long ago, former Under Secretary of Homeland Security Asa Hutchinson was named to the GVIS board of directors, joining such dubious luminaries as former New York City Police Commissioner Howard Safir and Nazzareno Paciotti, formerly of Pinkerton Investigations.

GVIS is just one of numerous corporatist entities looking for easy and secure subsidized profits by building the garrison state both at home and abroad. There will be plenty of work to go around as the Regime builds its own version of the Shenzen Residence Card Information Management System.

The embryo of the U.S. version of that program is the proposed Employment Eligibility Verification System (EEVS) or E-Verify. Adam Thomas of Press Esc offers a tidy summation of how this initiative -- highlighted in a recent White House press release -- will work:

"[E-Verify] will initially require more than 200,000 companies doing Federal business to use the system to establish employment eligibility of new hires and the validity of their Social Security Numbers. Later this system will be expanded to cover all companies and will include photo screening features through agreements to allow E-Verify access to the repository of photographs in the State Department of Motor Vehicles databases."

At the risk of making myself obnoxious on this point as on so many others, I'm constrained to observe that the envisioned role in this scheme played by the State DMVs illustrates yet again that local, independent police agencies have gone the way of the vinyl LP: They're not quite extinct, but might as well be.

Much as it grieves me to do so, I must quote the ACLU's analysis of EEVS/E-Verify: "Under this already flawed program no one would be able to work in the U.S. without DHS [Department of Homeland Security] approval -- creating a `No Work List' similar to the government's `No Fly List.'"



This is being done, of course, as an immigration control measure, and it's propelled by the kind of people -- such as these charming folks -- whose determination to keep Mexicans out of the country is on par with their indifference to the emergence of a garrison state within our country.
Oh, and that's hardly the end of the undertakings outlined by the White House:


*“The Department of Homeland Security will continue to explore effective and cost-efficient means of establishing biometric exit requirements at land border crossings.” (Emphasis added.) As I warned about a year ago, the real point of "border security" under the Homeland Security Regime is to keep us in, not to keep "them" out.

*“Starting January 31, 2008, DHS will phase in a requirement for passports or other secure documents for sea and land ports of entry.” The most tacit but unmistakable intent here is to compel any American who leaves the country for any reason to obtain a "secure" federal ID document; as others have pointed out, this is a necessary step toward the eventual creation of a Soviet-style system of internal passports and checkpoints.

*“The Administration is training hundreds of state and local law enforcement officers to address illegal immigration in their communities.” Wonderful! Allow me to find a bucket to hold my joy. This underscores, yet again, the fact that the entire immigration "crisis" has been exploited as a way to build a police state, with the support -- sometimes grudging, but often enthusiastic -- of the very people who would ordinarily put up at least some resistance.

Following the defeat of the immigration "reform" bill in the Senate last June, Michael Savage -- who helped himself to a large portion of the credit for that result -- shared a provocative thought with his audience. Dr. Savage reported that his evening walks regularly take him by a branch office of the Department of Homeland Security, a facility that includes a large motor pool. Recently, he continued, he has seen row after row of newly painted black buses with blacked-out windows. Those buses, Savage gleefully predicted, are being prepared for the day when illegal immigrants will be gathered by the thousands, tens of thousands, or hundreds of thousands, and forcibly deported.

Wanna bet?


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Your Next "Landlord" Will Speak Chinese

Meet your future landlord: Thanks to the Federal Reserve and our own profligacy, Washington is looking to China to bail out the distressed mortgage industry.


It takes a mind better attuned than mine to the arcane science of high finance to understand why the Dow briefly crested 14,000 today (July 17). The mystery deepens considerably when items such as this are taken into account:

"[Homebuilders] declined after the National Association of Home Builders/Wells Fargo sentiment index fell this month to 24, the lowest since January 1991, from 28 in June. Readings less than 50 mean most respondents view conditions as poor."

For several years, the manic real estate/mortgage/refinancing industry has been the only engine keeping our consumer economy aloft. The Federal Reserve, the Power Elite's official counterfeiters since 1913, has done everything it can to keep the housing and re-fi bubble inflated, as the dollar's increasing decrepitude demonstrates.

The official rationale for the Federal Reserve -- whose officers don't have the cojones to be honest and brazen thieves -- is that they exist to regulate and rationalize the economy by exercising sober, adult authority over the banking system. R-i-i-i-i-i-ight. That's why they spent the last decade or so pumping out money and credit with the giddy enthusiasm of a prankster spiking the Prom punchbowl with Spanish Fly.

This led to years of promiscuous mortgage lending in which financial institutions would open their wallets on very short acquaintance to practically anybody, irrespective of his background or qualifications. As a result, countless people on both ends of such deals got screwed, and the economy is pregnant with awful possibilities. I'd elaborate on some of them, but I think I've overworked this metaphor already.

We can already see the expanding collapse of the "sub-prime" mortgage sector, which in some communities is undermining property values for conscientious homeowners and (odd as this might seem at first) abetting the growth of the police state. Not surprisingly, investors are bailing out of the sub-prime market.

Trying to stem that hemorrhage is a task assigned to Housing and Urban Development (HUD) Secretary Alphonso Jackson (who is nowhere near as cool as virtuoso bassist Alphonso Johnson -- and no, that's not Basil Fawlty on lead guitar, but rather a very young John Scofield).

Where does a US government official go these days in search of investment capital?

That's right -- Beijing.

"Hey, honey -- our new neighbors are here to throw a house-warming party!"


His hat in his hand, Secretary Jackson took Mendicant Airlines to Beijing, seeking to persuade China's central bank "to buy more mortgage-backed securities after a surge in defaults by risky borrowers in the world's largest economy eroded demand for such instruments," reported Bloomberg News. Specifically, Jackson sought to sell the Chinese some securities issued by Ginnie Mae, a federally backed mortgage lender operating through HUD.


Ginnie Mae is a better investment than its better-known cousins Freddie Mac and Fannie Mae, Jackson insists, because HUD's mortgage association has the "full backing of the US government."

In other words: When Ginnie's mortgages go bad, Congress covers for them and gets the Fed to print up the "money" to cover the costs; other Government-Sponsored Enterprises (GSEs) such as Freddie and Fannie offer no such guarantees, even though they're widely believed to.

HUD is also seeking to sell mortgage securities to Chinese commercial banks, and Jackson intends to sign a "memorandum of understanding" on this matter with Chinese construction minister Wang Guangtao when he visits Washington in August.


Refinancing a mortgage with the First Bank of Mao is a little ... different. For some reason you have to agree to repaint your house in festive Proletarian red. The mortgage papers come bound in a little Red Book. And you have to sign with this huge ceremonial pen containing an embedded explosive charge.


Amazing as it may seem, as of June 2006, Beijing held over $107.5 billion in US mortgage securities. This is a trifling amount once it's understood that there is something on the order of $11.8 trillion in outstanding mortgages. But the bubble's collapse has just begun -- and Beijing is awash in cash. Although Washington is looking for Beijing's help to bail out its mortgage-granting GSEs, but given the extent to which the economy still depends on that sector, there's no reason to expect that our rulers would want the Chinese to stop there.

Until a "homeowner" pays off his mortgage, he's actually renting his home from the lending institution. I wouldn't be surprised if, several years hence, millions of American "homeowners" discovered that the "landlord" to whom they're making mortgage payments is the Chinese government.

A brief postscript....

Look, I'm aware that China has changed dramatically since the Cultural Revolution; in fact, according to friends and relatives who spend a considerable amount of time there, it has changed dramatically in just the last decade. While the Chinese government still describes itself as the vessel of "Marxism-Leninism-Maoism-Deng Xiaoping Thought," its commitment to global revolution is considerably weaker than that of the demented ideologues who surround the Dimwit-in-Chief. The Chinese themselves are astonishingly bright and admirably entrepreneurial. The regime, like governments everywhere, is run by some thoroughly nasty people. I would like to think that China is big enough and old enough that it can transcend Communism, but I'm not optimistic. I would love to be proven wrong.

And a personal request...

Please keep Korrin in your prayers. She is not doing well.

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