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According to a top Computer expert from Germany the Stuxnet virus which as been wreaking havoc on the Iranian nuclear program is just as effective as a military strike. Actually it is more effective,  it has set back Iran’s quest for nuclear capability by at least two years which is the best that can be hoped for with a military strike. And it was done without all the “mess” and human suffering which comes with a military strike

Little by little scientists are beginning to understand Stuxnet a computer worm developed with the sole purpose of doing what sanctions were not able to do, slow down the Iranian march to nuclear weapons. During the past year, Stuxnet the computer worm with a message from the biblical Queen Esther, not only crippled Iran’s nuclear program but has caused  a major rethinking of computer security around the globe (if you want to know how Stuxnet works click here).

According to a report in the Sunday NY Times, Stuxnet was tested in the Dimona facility in Israel’s Negev desert. Dimona is the (officially non-existent)plant where Israel runs its (officially non-existent) nuclear weapons program

Over the past two years, according to intelligence and military experts familiar with its operations, Dimona has taken on a new, equally secret role — as a critical testing ground in a joint American and Israeli effort to undermine Iran’s efforts to make a bomb of its own.

Behind Dimona’s barbed wire, the experts say, Israel has spun nuclear centrifuges virtually identical to Iran’s at Natanz, where Iranian scientists are struggling to enrich uranium. They say Dimona tested the effectiveness of the Stuxnet computer worm, a destructive program that appears to have wiped out roughly a fifth of Iran’s nuclear centrifuges and helped delay, though not destroy, Tehran’s ability to make its first nuclear arms.

“To check out the worm, you have to know the machines,” said an American expert on nuclear intelligence. “The reason the worm has been effective is that the Israelis tried it out.”

Officially US and Israeli officials will not discuss what has been going in the middle of the Negev, but new clues point to the fact that thevirus was designed as an American-Israeli project to sabotage the Iranian program.

In recent days, the retiring chief of Israel’s Mossad intelligence agency, Meir Dagan, and Secretary of State Hillary Rodham Clinton separately announced that they believed Iran’s efforts had been set back by several years.  Clinton cited the “weak” sanctions, which have supposedly damaged Iran’s ability to buy components.  Dagan, told the Israeli Knesset in recent days that Iran had run into technological difficulties (Stuxnet) that could delay a bomb until 2015.

As the virus continues to infect Iranian computers computer experts across the world are trying to figure out where Stuxnet came from. There is nothing but circumstantial evidence and it all points to the US and Israel). For example

In early 2008 the German company Siemens cooperated with one of the United States’ premier national laboratories, in Idaho, to identify the vulnerabilities of computer controllers that the company sells to operate industrial machinery around the world — and that American intelligence agencies have identified as key equipment in Iran’s enrichment facilities. Seimens says that program was part of routine efforts to secure its products against cyberattacks. Nonetheless, it gave the Idaho National Laboratory — which is part of the Energy Department, responsible for America’s nuclear arms — the chance to identify well-hidden holes in the Siemens systems that were exploited the next year by Stuxnet.

There is also the fact that computer scientists who are analyzing the computer worm have found a file name that seemingly refers to the Biblical Queen Esther.  Deep inside the computer worm that some specialists suspect is aimed at slowing Iran’s race for a nuclear weapon lies what could be a fleeting reference to the Book of Esther, the Old Testament narrative in which the Jewish Queen Esther pre-empts a Persian plot to kill all the Jews. One of the key files in Stuxnet was named “Myrtus” (myrtle) by the unknown designer. The biblical Esther’s original name was Hadassah, which is Hebrew for myrtle.

Officially, neither American nor Israeli officials will even utter the name of the malicious computer program, much less describe any role in designing it.

But Israeli officials grin widely when asked about its effects. Mr. Obama’s chief strategist for combating weapons of mass destruction, Gary Samore, sidestepped a Stuxnet question at a recent conference about Iran, but added with a smile: “I’m glad to hear they are having troubles with their centrifuge machines, and the U.S. and its allies are doing everything we can to make it more complicated.”

One interesting part of the program is that it was put in motion by President Bush. Yes liberals, this time you can say it, Bush did it.

The project’s political origins can be found in the last months of the Bush administration. In January 2009, The New York Times reported that Mr. Bush authorized a covert program to undermine the electrical and computer systems around Natanz, Iran’s major enrichment center. President Obama, first briefed on the program even before taking office, sped it up, according to officials familiar with the administration’s Iran strategy. So did the Israelis, other officials said. Israel has long been seeking a way to cripple Iran’s capability without triggering the opprobrium, or the war, that might follow an overt military strike of the kind they conducted against nuclear facilities in Iraq in 1981 and Syria in 2007.

The construction of the worm was so advanced, it was “like the arrival of an F-35 into a World War I battlefield,” says Ralph Langner, the computer expert who was the first to sound the alarm about Stuxnet. Langner, who runs a small computer security company in a suburb of Hamburg, had his five employees focus on picking apart the code and running it on the series of Siemens controllers neatly stacked in racks, their lights blinking.

He quickly discovered that the worm only kicked into gear when it detected the presence of a specific configuration of controllers, running a set of processes that appear to exist only in a centrifuge plant. “The attackers took great care to make sure that only their designated targets were hit,” he said. “It was a marksman’s job.”

For example, one small section of the code appears designed to send commands to 984 machines linked together.

Curiously, when international inspectors visited Natanz in late 2009, they found that the Iranians had taken out of service a total of exactly 984 machines that had been running the previous summer.

Interesting coincidence?

But as Mr. Langner kept peeling back the layers, he found more — what he calls the “dual warhead.” One part of the program is designed to lie dormant for long periods, then speed up the machines so that the spinning rotors in the centrifuges wobble and then destroy themselves. Another part, called a “man in the middle” in the computer world, sends out those false sensor signals to make the system believe everything is running smoothly. That prevents a safety system from kicking in, which would shut down the plant before it could self-destruct.

“Code analysis makes it clear that Stuxnet is not about sending a message or proving a concept,” Mr. Langner later wrote. “It is about destroying its targets with utmost determination in military style.”

This was not the work of hackers, he quickly concluded. It had to be the work of someone who knew his way around the specific quirks of the Siemens controllers and had an intimate understanding of exactly how the Iranians had designed their enrichment operations.

The reason why Stuxnet had knowledge of the workings of the Iranian centrifuges may have to do with the fact that those same type of centrifuges showed up in Dimona.

The account starts in the Netherlands. In the 1970s, the Dutch designed a tall, thin machine for enriching uranium. As is well known, A. Q. Khan, a Pakistani metallurgist working for the Dutch, stole the design and in 1976 fled to Pakistan.

The resulting machine, known as the P-1, for Pakistan’s first-generation centrifuge, helped the country get the bomb. And when Dr. Khan later founded an atomic black market, he illegally sold P-1’s to Iran, Libya, and North Korea.

The P-1 is more than six feet tall. Inside, a rotor of aluminum spins uranium gas to blinding speeds, slowly concentrating the rare part of the uranium that can fuel reactors and bombs.

How and when Israel obtained this kind of first-generation centrifuge remains unclear, whether from Europe, or the Khan network, or by other means. But nuclear experts agree that Dimona came to hold row upon row of spinning centrifuges.

“They’ve long been an important part of the complex,” said Avner Cohen, author of “The Worst-Kept Secret” (2010), a book about the Israeli bomb program, and a senior fellow at the Monterey Institute of International Studies. He added that Israeli intelligence had asked retired senior Dimona personnel to help on the Iranian issue, and that some apparently came from the enrichment program.

“I have no specific knowledge,” Dr. Cohen said of Israel and the Stuxnet worm. “But I see a strong Israeli signature and think that the centrifuge knowledge was critical.”

…Dr. Cohen said his sources told him that Israel succeeded — with great difficulty — in mastering the centrifuge technology. And the American expert in nuclear intelligence, who spoke on the condition of anonymity, said the Israelis used machines of the P-1 style to test the effectiveness of Stuxnet.

The expert added that Israel worked in collaboration with the United States in targeting Iran, but that Washington was eager for “plausible deniability.”

One thing can’t be denied, the Stuxnet worm has been a major obstacle to Iran’s desire to obtain nuclear weapons, saving Israel from having to attack Iran at least for a while.  Who ever developed the virus lets hope they are working on a follow-up because 2015 is not that far away.

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YID With LID

The next time you hear somebody say that the Affordable Care Act increases health spending or bends the cost curve up, just show them this nifty chart compiled by my colleagues at the Center for American Progress, which shows just how the law begins to lower Medicare spending:

– $ 100.4 billion: The amount of federal deficit reduction from 2010 to 2019 due to new revenue sources for the Medicare trust funds under ACA.

– 24 percent: The decrease in Medicare’s share of GDP under ACA provisions. Before the passage of comprehensive health care reform, the portion of GDP assumed by total Medicare spending in 2035 would have been 7.2 percent. With ACA provisions, however, this portion decreases to 5.5 percent.

– 7.5 percent: The portion of baseline Medicare spending that will be saved from 2011 to 2019.

The chart:

Of course, now that we’ve petted ourselves on the back for doing better than pre-reform Austin Frakt would have us look forward and argues that even with these savings, health care costs are still unsustainable:

Federal spending and revenue projections as a percent of GDP: Alternative Fiscal Scenario

All of this is a bit daunting when you realize that many of the policies that lead to the reductions in the first graph haven’t even been implemented and can even be reversed by weak lawmakers who will undoubtedly face intense lobbying pressure from providers, insurers, and others. Part of that is because the cost-cutting part of the law may not be specific enough. As Tom Daschle pointed out yesterday, “We lay out a very clear 10-year schedule, with great specificity about how insurance reform is going to work…[but] we don’t do that nearly as much with cost-containment and with delivery reforms.” “I think we could have put into the legislation specific targets and actions that would be required have to do with unnecessary care, in terms of primary care, transparency and even a more ambitious and delineated schedule for HIT, moving away from fee-for-service.”

But of course if we want to keep the country from going bankrupt we’ll need to keep lawmakers accountable and pave the way for more reforms.

Wonk Room

By Daniel Griswold

What had been a recurring story line buried in the business pages has now burst onto the front page: “Economic growth slowed by trade gap,” the Washington Post reports this morning in an above-the-fold headline.

The lead sets the stage for a story long on generalizations: “A widening U.S. trade deficit has become a substantial drag on economic growth as the country’s exports struggle to keep pace with the swelling sums that Americans are again spending on imported goods.”

The half truth in the story line is that exports fell by $ 2 billion in June compared to the month before, and that this has a negative effect on overall GDP growth. In our more globalized world, the rising wealth of our trading partners translates into more production in our own economy, and vice versa.

The fatal flaw of the story line (as I tackled recently here and at greater length here) is that it assumes that rising imports slow economic growth. That assumption, in turn, rests on a simplistic Keynesian view that if a portion of domestic demand is satisfied by spending on imports, that means less demand for domestically produced goods, thus less output and lower employment.

That view neglects the supply-side role of imports. More than half of what we import consists of goods consumed by producers—capital machinery, raw materials, parts and other intermediate inputs. Those imports help us produce more, not less. The Keynesian view also confuses cause and effect: Imports usually grow in response to RISING domestic demand. Consumers more eager to spend “swelling sums” on imports typically buy more domestically produced goods as well.

The bean counters at the Commerce Department “subtract” imports from GDP, not because those imports are a drag on growth, but to avoid double counting. If we want to count the number of widgets and other goods added to the economy in a quarter, we would obviously not count those that have been imported. But this does not mean the economy would have been that much larger if the widgets had not been imported.

The Post story adds to the misunderstanding by claiming: “At a basic level, trade deficits represent a loss of wealth for a country—money flowing abroad for goods and services produced elsewhere, supporting businesses and workers in other countries.”

This betrays a basic misunderstanding of wealth that Adam Smith exposed two centuries ago in The Wealth of Nations. Does wealth consist of money—pieces of green paper or blips on a computer or, in Smith’s day, bars of gold—or does it consist of the actual stuff that people produce to make their lives better, all those goods and services that we consume each year? Smith argued it was the latter. And in that case, a trade deficit at a basic level represents an inflow of wealth from the rest of the world—a cornucopia of cool stuff arriving everyday at our ports and stocking the shelves of our stores.

Of course, even if you think that dollars are the ultimate measure of wealth, obsession with the trade deficit ignores the fact that those dollars spent on imports quickly return to the United States. If they are not used to buy our goods and services, they are buying our assets—real estate, stocks, Treasury bonds, and so on. The “loss of wealth” supposedly represented by the trade deficit is almost exactly offset every year by a “gain of wealth” represented by the net inflow of dollars in the form of capital investment from the rest of the world.

Besides being wrong in its basic economics, making the trade deficit the scapegoat for slow growth poses a double danger for economic policy:

Danger no. 1 is that it tempts politicians to reach for the snake oil of protectionism to create jobs. If only we could stop the flood of imported goods, Americans would make more of those same goods themselves, creating millions of jobs. In reality, higher trade barriers impose a host of offsetting costs on the economy, resulting in lower output.

Danger no. 2 of blaming the trade deficit is that it diverts attention from policies that are far more plausible culprits in dampening growth. Politicians find it much easier to blame imported consumer goods from China for slower GDP growth than huge looming tax increases, expensive new health care mandates, a depressed housing sector, and a generally anti-business climate in Washington.

The trade gap should be the least of our worries.

Cato @ Liberty