Daily Archives: 16 August 2024

A Couple of Suitable Civil Sanctions

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General Motors is being sued by Texas’ Attorney General Ken Paxton for allegedly

unlawfully collecting driving data from users and selling it to other companies.

GMC allegedly

used technology that was installed in the majority of 2015 or newer General Motors vehicles that would “collect, record, analyze, and transmit highly detailed driving data about each time a driver used their vehicle[.]”

That’s a long time to be collecting and peddling personal information without the permission of the vehicle’s owner.

After all,

Unbeknownst to customers, however, by enrolling in GM’s products, they were “agreeing” to General Motors’ collection and sale of their data. Despite lengthy and convoluted disclosures, General Motors never informed its customers of its actual conduct—the systematic collection and sale of their highly detailed driving data.

I see two suitable civil sanctions here, assuming conviction. One is to force GMC to disclose the amount of money it received over those two years from its sale of those data. It must then be required to pay that money to each person who bought a GMC vehicle from those two model years, whether the vehicle was bought new or used. Yes, yes, identifying all the used vehicle buyers will be difficult. Cry me a river. GMC should have thought about that beforehand.

The other isn’t really a sanction, per se. GMC should be required to disclose each of the buyers of those data, and then each of those buyers should be required to certify that it has purged all of the data of this type that GMC sold to it.

It would be suitable, also, to go after criminal sanctions against the GMC executives who authorized the illegal collection of the data, who authorized the sale of those illegally collected data, and who carried out the collections, and who carried out the sales.

It’s time to get draconian in sanctioning these data thefts. Bad enough we have to deal with hackers; we shouldn’t have to be subject to such thefts from allegedly mainstream companies.

A Silly Tradeoff

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In an editorial regarding former President and current Republican Presidential candidate Donald Trump as “Central Banker”—The Wall Street Journal editors’ tongue-in-cheek term—those same editors noted this about the Federal Reserve’s economic models:

[T]he Fed staff’s models that are still rooted in the tradeoff between inflation and unemployment.

The editors are right about that being a mistake; although they don’t expand on that claim with their reasoning about why that’s a mistake.

My claim about why that’s a mistake is this. First, the Fed’s situation is rooted in its statutorily mandated requirement to maintain price stability and to maintain full employment. The view from Congressional and White House politicians, the Fed, and so many economists is that these are separate, if not mutually opposing (and so not so separate) requirements.

My view, then, is that the two requirements are closely related, but in sequence, not in opposition. Keeping prices reasonably stable—the Fed’s nominal inflation target of 2% per year works well enough—greatly facilitates a healthy, growing economy. That healthy, growing economy itself pushes toward full employment. The Fed’s strongest move toward its full employment mandate, then, is to satisfy its mandate of maintaining price stability and to take no overt action regarding employment.