Can We Fix Federated Authentication?

Bruce Schneier writes in his blog of a "New paper by Ross Anderson: 'Can We Fix the Security Economics of Federated Authentication?': There has been much academic discussion of federated authentication, and quite some political maneuvering about 'e-ID.' The grand vision, which has been around for years in various forms but was recently articulated in the US National Strategy for Trustworthy Identities in Cyberspace (NSTIC)."