Seven lessons about blackmail

That is the title of my latest Bloomberg column, here is the opening bit:

Every now and then, a few apparently random news events come together and influence how you see the world. My most recent lesson is that blackmail and blackmail risk are a lot more common than I had thought.

And:

…the main villains in these privacy losses are not the big internet companies. While it is murky exactly how the Bezos photos leaked, it seems to have involved old-fashioned spying and the interception of text messages (and possibly a renegade brother). Silicon Valley didn’t sell his data. As for Northam, the yearbook is from the pre-digital era, dug up in a school library. This information was not on the internet, though of course it did play a role in spreading it.

Third, billionaires can be pretty useful. As Bezos asked in his open letter on Medium: “If in my position I can’t stand up to this kind of extortion, how many people can?” In this case, both the billionaire and the medium of communication are the good guys.

Fourth, fears of a new era of blackmail based on Photoshopped images and so-called deep fakes (phony but convincing video) may be overblown, or at least premature. In the cases of both Bezos and Northam, the authenticity of the source material (text messages and photos) is not really being questioned, and both stories are receiving intense scrutiny. Rather, the debate is over the provenance and significance of the information.

There is much more at the link.

Comments

"the debate is over the provenance and significance of the information."

That is indeed a hopeful sign, though a small one. Although business leaders and organizations are still being swayed somewhat by the hype machine of Big Data, there's growing realization that data don't provide any answers. It's how well you can interpret the data and put it into context that provides the answers. Questioning the provenance and significance of information is a part of that.

Let's not forget that Obama relied on the unsealing of sealed divorce records of Hull and Ryan to win his Senate seat. Good, David Axelrod. Now, Professor Cowen is concerned about poor Jeff Bezos, whose WaPo rag spreads an ongoing stream of disinformation. Democracy Dies in Darkness? How do you like the light, Jeffie?

Actually, we can fairly well guess what Bezos feels about the light, summed up in a single pithy phrase - 'publish and be damned.' Which in the case of the National Enquirer apparently violating its agreement not to commit criminal acts like extortion connected to catch and kill, likely means even more than the reference to the Iron Duke suggests.

You can read what Bezos thinks here - https://medium.com/@jeffreypbezos/no-thank-you-mr-pecker-146e3922310f

Thank you, Mr. Berger for reminding the readers of this blog on how Obama rose to power with the illegal release of divorce documents.

You’re welcome, but for the majority of the commenters here, it will make no difference.

It's such a breath of fresh air to read comments like yours. If only the crimes of Barack Hussein Obama were more widely known. And I'm totally not pretending I'm not you, Rich Berger.

"Democracy dies in darkness." Democrats die in sunlight.

The lying media are all about deciding what information the public must not know because it reflects badly on Democrats and covering those stories with a pillow until they stop breathing.

I have complaints about Bezos, Amazon, and the WaPo.

Nonetheless, I am very glad to see Bezos resisting blackmail and 100% wish him success in taking down the extortionist.

This is very demeaning and degrading to billionaires. I'm shocked at where this country is headed.

What’s wrong with blackmail? https://heinonline.org/HOL/LandingPage?handle=hein.journals/tcrit5&div=4&id=&page=

LOL. Criticizing billionaires is more demeaning than outright blackmail. Libertarians can be so backwards at times.

I think it was sarcasm. But it's amusing that Tyler thinks 'billionaires can be pretty useful' and gives their immense power over others as his justification. I only *wish* he were sarcastic.

I am one degree seperated from a few billionaires.

One is a bit of a freaker. One is a ruthless ahole that messes with his lessor neighbors for spite. One is useless idjit. One is harmless but the children are a mess of addiction and scandal.

Theres a couple more that manage to keep a low profile.

Lol just like the rest of us. Theres nothing magic about billionaires. Except they are in a sense extreme hoarders, and that their quirks and crimes have outsized impacts

Right. It’s analogous to Godzilla and King Kong battling it out in Gotham, or somewhere. Meanwhile destroying the built environment, or polis. Just what neoliberals have been engineering since 1938 or so, reducing certain aspects of the polis to rubble so their preferred version of markets can be institutionalized & encased in what’s left. But good news today: looks like Amazon’s attempt to grift New York taxpayers has ended.
One of Tyler’s sentences should include the emphasis “Silicon Valley didnt *SELL* [Bezos’] data”. Analogous to the criticism of Shoshana Zuboff’s title “Surveillance Capitalism” mis-placing the emphasis; it’s just capitalism.

Plus, "blackmail" is racist.

@ (the real) Dick the Butcher - would you rather call it "WhiteMale"? lol

Besos should have pulled a "Peter Thiel" and sued in California, where public disclosure of private facts is actionable, even if true (unless for the public interest like a national emergency). California, like Europe, leads in this sort of privacy law.

Great points.

Hey Ray!

LOL indeed.

News just heard: AMZN's HQ2 is not coming to Long Island City, Queens, NYC.

No 25,000 plus-or-minus high-paying jobs; no $27 billion net tax revenues. What's not to like?

NY loses. The imbeciles that elected the Socialist "It" Girl Strike Again.

I'd sympathize with Gov. Cuomo if he were not a pompous scum bag.

We’ll see. Ny definitely lost some tax revenue, but the deal was absurd.

Truth is skilled workers want to live in NYC. And they were always going to choose NYC. And my guess is those jobs.....still happen. But more slowly. Of course NY state is the biggest loser here in terms of taxes. But they would waste the money anyways.

My wife is a big fan of "blackmale" if you know what I mean ........

'blackmail and blackmail risk are a lot more common than I had thought'

Almost as if money is not the only way to influence how people act.

'the main villains in these privacy losses are not the big internet companies'

Depends what one means by 'big Internet companies.' Spearfishing generally involves collecting enough information to make the attempt look convincing, and in such cases, the 'big Internet companies' are invaluable. And it is not because they are selling data, it is because they are collecting it and making it available to anyone with a browser (does LinkedIn count as a big Internet company?).

'Third, billionaires can be pretty useful.'

Of course, the person most likely to have authorized that attempted extortion was also a billionaire, one quite possibly interested in helping out another billionaire, but why point out that billionaires are like everyone, just as likely to be the villain as the hero in any particular narrative.

"Fifth, the Republicans were correct two decades ago when they argued that President Bill Clinton’s dalliance with Monica Lewinsky was a grave case of misconduct."

False. Both Clinton and Trump's many dalliances have shown that it is not that easy to blackmail a sitting POTUS. Putin style kompromat is less and less effective these days thanks to our pioneering philanderers. The next president could have their dick pix posted on Twitter and nothing would happen because the American people will giggle for 10 seconds and then ultimately don't care about these things. Having looser moral standards compared to previous generations is not without disadvantages but also has advantages of its own.

"Both Clinton and Trump's many dalliances have shown that it is not that easy to blackmail a sitting POTUS. "

Clinton went to an awful lot of effort, including lying to the entire nation on public TV, in trying to deny that affair. That to me, indicates that it could easily have been used for blackmail.

Thanks(?) to Trump, no one will ever have to worry about that sort of thing being a problem for politicians again.

So what did happen in Helsinki?

I really think you have the sign on deep fakes wrong. Once it's as easy to produce convincing audio/video as it is now to create convincing photos, I think it will become really difficult to prove authenticity of any incriminating material. Think about it, you can not only fake a clip, but also fake news anchors covering the clip, and YouTube celebs commenting about it. Where can you turn to establish voracity? How many people will care to put in the effort? Easier for just write off basically everything. ...Of course, also a great time to invest in pornhub.

Pretty clear that Trump and his Saudi allies are behind this dirty tricks and blackmail campaign against Bezos and WaPo for the Khashoggi killing. Bezos should call in some favors from DC for proper recourse.

So, Trump's and his Saudi allies' possess super powers including the power to force billionaires to photograph their junk and (admitted to) send them to their mistresses?

"Bezos should call in some favors from DC for proper recourse." As if he had any to call.

I thought the deep state was a lie dreamt up by redneck hillbillies, "white nationalists" and other assorted deplorable people.

The deep state/swamp doesn't have unlimited capacity for coup d'etat. They have been over-busy, feverishly straining 24/7 (for Obama and Hillary) to divert attention from their 2009 to 2017 high crimes and misdemeanors, and to try reverse the November 2016 election.

You need to call your head shrinker and ask that your meds get adjusted after Mueller comes up with no Russia collusion.

This is a joke, right?

Bezos fell for a world-class adventuress and acted like a moon-calf high school student in texts to her.

She bragged about her conquest and shared the evidence with friends and family, who were gratified to be in the know and happy to spread the news.

The story was too juicy/creepy not to get out. It didn't need a push from anyone, let alone the White House or the Saudis. The usual rule is, when your (perceived) enemy is in the process of making a fool of himself, don't get in his way.

Meanwhile, poor, powerless Bezos owns the biggest megaphone in political media today. Maybe he can convince the editorial staff at his little hobby paper that a conspiracy is afoot -- look! squirrel! -- but reasonable people are not going to buy the notion that the National Enquirer can take down the Washington Post or Jeff Bezos.

He is the agent of his own embarrassment. Simple as that.

I've seen many photographs of Jeff Bezos(clothed). Could he look even goofier, naked?

His bald head and wrinkly neck already look like a penis.

All fair points except for the point on "being good". There are still lots of potential avenues for blackmail with content shared between couples who've done nothing wrong via hacking or theft (or fishing). Hell, there's an entire episode on Black Mirror about this type of stuff.

Perhaps that advice is instead "upgrade your data security, a lot, and take your life offline where possible".

Exactly. How does “be good” apply to Bezos exactly? These types of communications are routine between people in a relationship.

Is it that there was no clean break before Bezos started dating Sanchez? As I understand, Bezos had separated prior to dating her.

The reality is that no matter how “good” a newsworthy person may be, there will always be details of their lives that they wish to keep private and make them susceptible to blackmail.

But Bezos has no problem working hand-in-glove developing advanced surveillance technologies for the government and police departments.
His attitude is privacy for me but not for thee.

Separated isn't divorced. The real issue might be how this affects his settlement with his soon-to-be ex-wife.

Immaterial. Even if she gets half he's still like the 4th richest person in the world (and she is too)

But it's less. Rich people always want more.

If so, that's kind of sick. At that level it makes zero difference.

Warren Buffet advises against doing anything you wouldn't want to read in tomorrow's paper. Somehow he has presumably withstood the irresistible pull of sending people pictures of his dick.

What's interesting to me is how the goalposts have shifted. Clinton had to lie about smoking pot, and having an affair. Obama admitted to using drugs in his youth. And Trump, of course, has hundreds of things in his past that in Clinton's day would have kept him from office.

The blackmail aspect of Bezos' story is him wanting to keep the affair secret (which will always be an issue for married cheaters), the dick pic is barely relevant.

Am I wrong to think that the dic pic is relevant? I mean, some 90%+ of adulterers wish to keep their cheating secret. How many of them go full Weiner and send dic pics!? Given his profession and background it is fair to ask: Is he an idiot? Or an idiot who thinks the rules don’t apply to him?

Famous or not, anyone who sends a dick pic is an idiot. But if the Enquirer were threatening him with publishing a dick pic he sent to his wife, would that even have mattered? In 2019, it's just another dick pic.

2019. What a magical year where this is even a conversation.

If you asked me 10 years ago: “will the world’s richest man be embroiled in a scandal for sending a dick pic, and will that be not the dumbest thing to be front page news that week” .....

In the case of Donald Trump and Stormy Daniels or the Playmate girl, why do people say President Trump paid hush money, rather then he was shaken down or blackmailed?

Or the women were blackmailed instead.

Although my wife has more experience being blacknailed than blackmailed

Trump's whole political angle was to say that he had no clue who this Stormy person was and to deny, deny, deny. Saying he was blackmailed by the very person he said he didn't know would completely blow his cover. That would have been a very Giuliani-like move to make.

'why do people say President Trump paid hush money, rather then he was shaken down or blackmailed'

Timing, mainly - Trump had a vested interest in making sure people who had sex with him did not reveal that to voters just before the election.

Along with that whole catch and kill framework - 'American Media Inc (AMI) told prosecutors it worked “in concert” with Trump’s campaign when it bought Karen McDougal’s story of a sexual affair with Trump, which it suppressed “to prevent it from influencing the election”.

The publisher revealed details of the so-called “catch and kill” deal for McDougal’s story in an agreement with federal authorities that means the company will not face charges, prosecutors in Manhattan announced on Wednesday.' https://www.theguardian.com/us-news/2018/dec/12/national-enquirer-trump-payments-david-pecker-catch-and-kill

Yes, but Trump had consensual sex with the two women. The Playmate says she wanted to marry him!

So, who would know Trump and the two women had sex, unless the women said so?

They were obviously willing to accept money to be quiet, which is hardly gentlewomanly. One should keep quiet about affairs as a matter of class and manners, if the "relationships" were consensual.

This sure strikes me as blackmail---but it gets played as "paying hush money." You do not have to pay hush money unless you are getting blackmailed.

Since there may be a (informal) length limit, let's tighten the answer up -

'unless the women said'

Why should the women not be allowed to talk about their consensual sex partners? We all agree (well, now that is, after repeated denials by one half of those consensual pairings) that such consensual sex occurred in these two cases, and apparently no NDAs were signed at the signed at the time.

'They were obviously willing to accept money to be quiet'

Well, McDougal was promised a number of things, which she then had to go to court to actually receive.

'which is hardly gentlewomanly'

Porn stars are not generally recognized as being gentlewomen.

Admittedly, this might have been too mean to a billionaire -

''One should keep quiet about affairs as a matter of class and manners'

Like this? 'The veteran newsman contemplated the question. "It's usually murder, money or sex." Donald fired back: "Marla says with me it's the best sex she's ever had." Nachman's face lit up like a firecracker. "That's great!" he said. "But you know I need corroboration."

"Marla," Trump yelled into the background. "Didn't you say it's the best sex you ever had with me?" From a distance, we heard a faint voice: "Yes, Donald." Only years later did we learn that Trump sometimes impersonated voices to reporters. I still can't be sure whether the voice in the room was really hers.

Thus was born one of the most famous tabloid headlines in history: "Best Sex I've Ever Had!" Hanging up, Jerry looked at me and we giggled. Back then, men of that rank didn't discuss their sex lives on the record.' https://www.hollywoodreporter.com/features/i-wrote-donald-trumps-infamous-best-sex-i-ever-had-story-guest-column-1101246

And one hopes this isn't being too mean to another billionaire and one of his media properties -

'You do not have to pay hush money unless you are getting blackmailed.'

This is incorrect. People pay money (or attempt to pay) to hush up things all the time, particularly when those things might impact their professional career or have legal implications (which can lead to further legal problems, of course). The main difference is the events that cause the transaction - someone going to the National Enquirer is obviously not engaging in blackmail. However, someone who goes to the National Enquirer and is then basically stiffed after receiving an offer requiring her silence is clearly a case where money is being used to hush something up. As noted in the linked article at the top of this thread

Seems like this is much more of a case of what’s good for the goose is good for the gander. Bezos wants privacy for me but not for thee. TC needs to do his typical propagandists role of defending the aristocrat though.

Of course, Bezos was going to use the material gathered about the NE by laundering it through his Post organ for political benefits... The "blackmail" in this situation in this scenario being thrn an attempt to stop Bezos using his vast power and influence for a politically motivated witchhunt.

Your post is considered demeaning to billionaires. It will be removed by the authorities within the next 24 hours.

The Management

"My most recent lesson is that blackmail and blackmail risk are a lot more common than I had thought."

Such is life in America.

Deep state deep fakes.

https://www.wired.com/2010/05/cia-mulled-saddam-gay-sex-vid-made-osama-tape-instead/

Sounds hot

that people are afraid of being caught.

Well, yeah. That's what peer pressure, social mores and law enforcement is all about.

works against the possibility of second chances in life.

That's what record-keeping is all about. That's why we hear about how many convictions some felon has had. Or how many Oscar nominations an actress has received. As soon as one's birth certificate is issued a chain of business and government records is established that ends only in death.

That shit about stuff going on one's "permanent record" is true now.

Let's not forget that Obama relied on the unsealing of sealed divorce records of Hull and Ryan to win his Senate seat. Good, David Axelrod. Now, Professor Cowen is concerned about poor Jeff Bezos, whose WaPo rag spreads an ongoing stream of disinformation. Democracy Dies in Darkness? How do you like the light, Jeffie?

Cowen is repeating what has already been written about the Bezos saga: billionaire takes dick pix and sends them to his mistress and is a hero for it, not because taking and sending a dick pix or having a mistress is admirable but because another actor in the saga, the owner of the tabloid, is worse. It's all relative. While it's true that this sordid episode in the life of world's wealthiest entrepreneur has not adversely affected his company's stock, it raises in my mind how and with whom Bezos spends his time. He is either superhuman or he is shirking his responsibilities to his family (children), his company and its shareholders and employees, or his own mental health. If the market asks a few unfortunate questions and the market price of his company's stock plummets, is Bezos still the hero? Who then is the victim? Has Cowen written a review before the book has been completed? Of course, this all highlights the main problem with the internet and instant communication: there's lots of action but precious little thinking.

Part of what's being ignored in all this is Bezos' ego. He's supposed to be one of the smartest guys in the room and what he did was something a stupid 16-year-old would do.

Jeff Bezos has become Jeff Bozo and TC is still acting as defense poodle.

I too found it odd that a man of his age would still be so thoroughly entertained by the thought of naughty pictures, of his ownself. I read some speculation that the magnate might be taking testosterone. This would be too neatly perfect to be true, though - given the current harsh attitude of the mainstream media, WaPo well-represented, toward teenaged (white) boys, whose original sin must be partially hormonal - since the media has not (yet) opined against small boys in little britches.

He should grow up and be like Mr. Musk.

I can't keep up with what's good or bad these days. So Howard Schultz and Jeff Bezos are the good billionaires, right? What about Trump? Is he a good billionaire or an evil one? I want to make sure I cheer for the right people.

Peter Thiel is a billionaire who took action against invasion of privacy and defamation, but he's not celebrated like Bezos because of his politics.

Well, along with the fact they destroyed a media outlet in an apparent personal vendetta, keeping his involvement hidden as long as possible.

Seems like actions speak louder than politics, Unless, of course, your politics involves taking action to destroy media outlets that do not follow whatever rules you think applicable to yourself.

He destroyed a really shitty media company, and made some of the others to be more careful. +1000 Peter Thiel

'a really shitty media company'

Well, he certainly thought so. Strangely, not everyone agrees that media companies deserve being destroyed through the secret funding of a billionaire that finds that company shitty.

'and made some of the others to be more careful'

Well, not the National Enquirer it seems, though of course, no one has ever thought of the National Enquirer as being a shitty media company, right?

You may have a point. But it was them being a shitty company that destroyed them, not Thiel.

Agreed. I applaud the actions of both Thiel and Bezos in these cases.

Maybe Thiel isn't celebrated like Bezos because he isn't the world's wealthiest man like Jeff and does not run the world's most valuable public company like Amazon?

Trump's not a billionaire

"blackmail and blackmail risk are a lot more common than I had thought"

(i) And yet you didn't mention the Kavanaugh hearing.

(ii) That strange cove, ranting Karl Denninger, advances a fascinating notion. He reckons that the Deep State tries to deny office to any politician (and others in public careers) whom it cannot blackmail. So if your record is pretty spotless (or, I suppose, if your record is so well-known that you can't be blackmailed over it) then it will move heaven and earth to keep you out of office. Seeing the Dem response to Tulsi Gabbard's candidacy makes me wonder whether she's falling foul of this behaviour.

Similarly, if Trump's antics over the years are already public knowledge then they'd be especially keen to keep him out of office, or to handicap him while he's there. Hence, presumably, the Russian collusion fantasy.

'And yet you didn't mention the Kavanaugh hearing.'

Because it did not involve blackmail.

estamos prediciendo
premio pulitizer está en el futuro de los autores

Now do Manafort.

Seems a more interesting intersection of blackmail(s), and of course more critical to the integrity of democratic government.

Or was this the Straussian lead-in to all that?

"Fifth, the Republicans were correct two decades ago when they argued that President Bill Clinton’s dalliance with Monica Lewinsky was a grave case of misconduct. In addition to its effects on her life, it opened up the commander-in-chief to potential blackmail, and it’s now clear most people underestimated that risk."

What we wouldn't give now for a normal and discreet dalliance between consenting adults.

Fraud and tax evasion != blackmail.

I think you wanted to do a Venn diagram sort of thing. Fraud, tax evasion, and blackmail may certainly overlap. With each other and other things.

What?

Manafort is a crook, that’s obvious. It also has nothing to do with blackmail, which is the subject of the article. Blackmail literally has not come up in any of the financial crimes or process crimes (lying to FBI) that he has been accused or convicted of.

He certainly does not need to worry about blackmail, as he’s facing life in prison for tax evasion and wire fraud.

The Eastern Europeans have something on Manafort at least, and Manafort has something on Trump at least. Is no one really blackmailing anyone?

Do dangling pardons imply kept secrets? When is a kept secret a favor, and when is it blackmail? When is a pardon a favor, and when is it a payment?

The distastefulness of the National Enquirer has been constant over time, and no one will miss it* - but this is hardly a battle between media titans. Where is the Enquirer even sold? More like Amazon versus the Green Stamp booklet.

*Just please don't take away my Daily Mail. They're the last of the reporters. True, a lot of time they're reporting on girls in tiny bikinis. But when anything happens, seemingly anywhere in the United States, they're mysteriously and fearlessly first with the details.

From what I have read, J. Edger Hoover at FBI collected tape recordings of JFK's and maybe RFK's dalliances, and used the information to extort them, namely, to keep Hoover on as FBI director. He stayed in the job for life. President Johnson would listen to the recordings for fun.

I think extortion works in the university setting. A coed can cry "rape" about any professor who doesn't toe the line, and we must believe the women! Charges will be dropped as soon as the professor adopts an approved party line. Show me the man, and I will show you the crime.

Murray Rothbard believed blackmail should be legalized. He thought blackmail payments are just a voluntary monetary transaction.

Earl Thompson argued that blackmail was just socially destructive rent-seeking, consuming valuable resources along Gordon Tullock lines. So blackmail, like protection rackets and extortion and kidnapping, should be outlawed.

Actually, a great many yearbooks are digitized and can be viewed on Ancestry.com.

Seven lessons about blackmail

There is only one observation to be made: opportunities to blackmail anyone are fewer because we live in a shameless age. The people who can be blackmailed are in occupations wherein personal virtue is still expected (e.g. clergymen, albeit just barely) or people who work in environments where witless pseudo-virtues are the order of the day (and enforced by HR twits and company lawyers). Bezos vulnerability was contingent on how much his wife would want to carve out of his middle (not something the blackmailer can ascertain in advance).

Beyond that, you have to be caught with a dead girl or a live boy.

Warning: this is highly speculative. Future blackmail attempts using this comment will not work. I will simply deny that I ever believed this.

Laws preventing blackmail are a remedy for well-known failures in the market for information. When blackmail is legal, the amount of information produced depends on the value of the information to the two counterparties. This would be fine if information were an ordinary good where marginal costs are positive and all interested parties have an opportunity to bid (think about the market for cars). But the MC of spreading information is zero. That means anyone willing to pay some positive amount should be able to bid. But because of high transactions costs, that market doesn’t work well at all.

Suppose I happen to own the last existing copy of Governor X’s yearbook which contains a very embarrassing picture of the Governor. (Assume I acquired the yearbook legally.) Governor X is willing to pay $1 million to keep information about his behavior private. I know this and so I offer to sell the picture for, say, $900 k. The Governor is not happy and accuses me of a being a sleazy blackmailer but he agrees. It would seem that this is the kind of mutually beneficial exchange that we should applaud, but it’s not. That’s because there are people out there who would pay something for the picture. Suppose there are 2 million people in the state who dislike the Governor and would be willing to pay at least $1 each to see the picture. The picture has a higher value in the hands of the Governor’s opponents but because the blackmailer cannot effectively trade with 2 million people, the deal doesn’t get done.

Of course, my argument still has a problem. A law against blackmail may prevent information from flowing to low-valued uses but it doesn’t guarantee that information will flow to higher-valued uses.

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