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And not just Ebay — Amazon, the credit card companies, and every small business that accepts electronic payments. In practice, this means that the vaunted housing bail-out bill requires us all to disclose everything about our personal lives to government inspection and analysis.

Read it and weep. I am not exaggerating.

I would not have wanted to be in the position of the telephone company executives who had to decide whether to wiretap American citizens illegally at the request of the government. At least I assume there was some such scenario, someone in the telcos who hesitated a moment about the right and wrong of the decision. Was it presented as something patriotic and, if arguably illegal, something for which the telcos were assured a later get-out-of-jail-free card? Or was it presented as more of a threat, with the government reminding the executives that they were in a highly regulated business, and the FCC and other authorities could make unrelated decisions that hurt the profits of uncooperative carriers in the future?

Probably we’ll never know, because the matter will never come to trial. The companies are being given immunity from private lawsuits by citizens who were illegally wiretapped. The New York Times story seems reasonably fair, and quotes one of the Electronic Frontier Foundation’s lawyers.

So a Democratic congress has bailed out a Republican president’s illegal methods of surveillance on American citizens. The re-upped FISA seems to have some “never again” language along with the immunity provisions, but as a way to run the country we seem to have taken a great leap: The executive commands private businesses to do something illegal to private citizens, the corporations cooperate, and after the fact, the legislature bails out the executive branch and protects the profits of the corporations in one fell swoop.

Of the people, by the people, and for the people?

We are featured on InformIT today, with two short articles that are not taken from the book: One on the good and bad use of cell phone data to locate individuals, and one on everyday eavesdropping.

Sara Rimer has a nice piece in the Memorial Day New York Times about sustainability houses on college campuses‚Äìresidences where students time their showers, use the drained water to flush their toilets, and so on. Some reported behaviors, such as not bathing at all for extended periods, remind me of ’60s naturalism. Other activities are timelessly collegiate, and unlikely to last a day beyond graduation‚Äìsuch as plastering a picture of John Edwards to the shower stall ceiling as an encouragement to shorter showers.

But one sentence in this story is strikingly modern. “By¬†next fall, the house‚Äôs 24-hour energy-use monitoring system will be fully up and running. Every turn of the faucet, every switch of a light, will be recorded, room by room.”

‚ÄúIt‚Äôs not about telling people, ‚ÄòYou have to do this, you have to do that,‚Äô¬†‚Äù explains one of the students. Not today, at least. I’m betting that the monitoring technology will become more widespread and more coercive‚Äìperhaps not through direct government surveillance, but through economic incentives and social pressures. And all the standard problems with bits will arise with that information about faucet turns and light-switch-flips: who has access to the data, what will it be used for, is it deidentified, will it leak?

Today’s New York Times has a lovely account of corporate surveillance that gives a flavor of the sort of thing that can go wrong. Deutsche Telekom, a large German phone service provider, irritated by repeated leaks about layoff plans, decided to use the data at its disposal to figure out if the leaks were coming from its board of directors. So it turned a lot of call records from 2005 and 2006 over to a third party to check for conversations between directors and reporters. (You may recall that almost exactly the same thing happened at HP not long ago.) Happily, the Germans seem not to be taking this privacy violation lightly. But it’s another example of a general fact about bits: Once they are collected for one reason (in this case, billing, or perhaps traffic analysis), it’s easy to hang onto them just in case they might come in handy later. With the passage of time, the odds go up that someone with access to the data will hatch a bright new idea about how to use it.

Some estimates of the value of Facebook run as high as $15 billion. How can that be? It’s just some software and some people, right?

Wrong. It’s data about who hundreds of millions of people know, and who those people know, and how often they communicate, and what they are interested in. Every time someone agrees to be your Facebook friend, the two of you have established a link in Facebook’s gigantic friendship graph. Even the fact that you asked that person is probably recorded somewhere, even if he or she ignores you.

As far as I know, the connections between Reverend Wright and Barack Obama, and between Reverend Hagee and John McCain, were not discovered by electronic sleuthing. But such connections are going to be easier to discover in the future than in the past. Facebook data would be a gold mine, but it won’t help much if you decide to stay off such social networking sites. It’s easy for computers to connect people whose names appeared together in old newspaper articles. Photos and videos will be subject to face recognition, so it will be possible to build a huge “appears-in-the-same-image-with” graph automatically. Public figures will have to worry more and more about their associations, as it looks like the public interest in their circle of acquaintances will not diminish anytime soon.

And the power of the government to create such structures of social connections will be even greater than what can be gathered from public sources. The UK may implement a massive data aggregation system, including data on every phone call, email, and instant message in the nation. The fight against terror demands such ubiquitous surveillance, goes the claim.

Would we live our lives differently, fearing that our everyday social contacts, and our adventurous escapades, are all going to wind up in the government’s great social network? How will the world change when clumsy attempts at romantic outreach, phone calls placed to wrong numbers, and group photos snapped at parties all turn into contextless edges in that permanent, all-encompassing social graph?

We say that technology is neither good nor bad, it all depends how it’s used. The forces of good won one yesterday.

Kait Duplega’s laptop was stolen. Sometime later, a friend called her to say she was glad to learn that it had been recovered. The friend saw that the laptop was in use and connected to the Internet.

The New York Times story doesn’t explain how the friend figured that out. Perhaps Ms. Duplega uses Skype or some social networking software that informs her friends when her computer is connected to the Internet so they can contact her. In any case, the computer was still in the hands of the thieves. Ms. Duplega, who works at the Apple store in Westchester County, used a remote-access program to snap a photo of the thieves using the camera mounted above the laptop’s screen. Her roommate recognized the men in the picture, and the police arrested them.

This is a funny story. So is the story about the thief who stole a Global Positioning System and turned it on, which not only helped him know where he was, but made it easy for the police to locate him. But these tales are a little disquieting too. Do you care if your friends know whether your laptop is connected to the Internet? Depending on your habits, they might take that to mean you are ignoring them. In my own case, it would pretty accurately tell you when I am commuting or traveling, as those are about the only times I don’t have my laptop online. But if someone stole my computer, I might wish that like Ms. Duprega, I had set it up to share a few bits with the world about what it was doing. And what could someone else do with the bits on your computer if it were stolen? The men who stole Ms. Duprega’s machine were apparently planning to buy a bed–perhaps using her credit card number, stashed away on her computer.

One sign of a maturing industry is the development of aftermarkets. First there were cars, then there were used car dealers. And first there were bits, and then there were … used bits dealers? Some used bits transactions are legit, if possibly annoying. You give Sam’s Health Foods your email address so Sam can confirm your order for organic bean sprouts, and the next thing you know, you are receiving emails from Mary’s Gardening Tools. Sam decided to share his email address files with Mary, and Mary thinks that bean-sprout-eaters are more likely than other people to be gardeners. Of course, this is the kind of “sharing” that puts a few bucks in Sam’s pocket.

Other used bits dealers are like the people who steal catalytic converters and fancy headlamps from late-model cars and then sell them on the black market. There is a robust underground economy in bank account numbers, credit card numbers, eBay accounts, and even full identities. According to Symantec Global Internet Security Threat Report (downloadable free here), the going rate for bank account numbers is $10-$1000, while credit card numbers are $0.40-$20.00 each (but are usually sold in bulk). Bank account numbers cost more, because getting money from a bank account is quicker and, if properly done, leaves fewer fingerprints than converting a credit card number to cash. Identities go for $1-$15, but EU identities cost more than US identities, perhaps because of rising demand.

It’s a fascinating report. Symantec is in the security business, but many of the trends and recommendations are of general interest, unrelated to Symantec’s products. For example, the robust market in bank account and credit card numbers has made services like Paypal increasingly popular. Such electronic payment systems are guaranteed against misuse and they do not require revealing any financial information to the online store.