Category Archives: ethics

Experts Everywhere

Posted on by
Reply

A couple of professors at the University of Pennsylvania’s Wharton School Department of Legal Studies and Business Ethics want a body of Experts to supervise risks from emergent AI, saying that such a body would be better than an FDA-like regulatory body, or Congress through statutorily enabled product-safety laws.

They’re right that having a government body of experts like the FDA do this sort of thing is determinedly suboptimal. They’re right, also, regarding Congress, although Congress is considerably more malleable than a department or agency of bureaucrats.

But another body of Experts?

Bank supervision, which emerged in the Civil War and took its current form out of the Great Depression, offers the best framework for overseeing the most advanced AI labs.

After all,

Frontier AI labs such as OpenAI, Anthropic, and Google DeepMind are different.

And there’s always an excuse for standing up yet another bureaucratic regulatory body. In the case of their bank supervision model, about which they’re so enthusiastic, they give their game away [emphasis added].

Banks are too complex to govern through legislated rules alone, too important to leave to market discipline, and too dynamic for one-time approval.
Bank examiners often sit inside the institutions they oversee.

That’s the problem with our economic system government overlords. With the Panic of 2008, the Federal government created out of whole cloth the myth of some (ultimately government favored) businesses are too big to fail and so must always be guaranteed a government bailout. That confidence in the Federal apparatchiks sitting inside the banks also is misplaced. It’s only necessary to see the failures of the Silvergate, Signature, and First Republic banks to see the intrinsic failure of this. Those banks didn’t only fail through their own mismanagement; they also failed because their regulators were incompetent enough or lazy enough or complacent enough to miss those bank managers’ basic economics error of borrowing short-term while lending long-term and letting those two get ‘way out of balance. That allowed their short-term debts to come due before they had the long-term debt income to cover.

But the good professors want a board of Expert Apparatchiks inside the OpenAIs, Anthropics, and DeepMinds to oversee how these handle risks of emergent AI.

And this:

Banks share information with supervisors that they could never safely disclose publicly.

AI software is too important, too critical to national security, to share with apparatchiks of government. Our Federal government is infamous for its inability to defend against PRC cyber espionage. It’s infamous, also, for its bureaucrat employees leaking confidential financial data about businesses and persons of which those bureaucrats personally disapprove.

And this:

An AI risk supervisor could be funded by industry fees. Its leaders should be Senate-confirmed and removable by the president, but its expert staff should be insulated from day-to-day political pressure.

No.

Experts have their uses, often very important uses. On the witness stand to explain this or that aspect of a crime, balanced by another expert on the witness stand with a differing explanation. In police department forensics sections. As teachers in environments where their expertise is more important to the teaching than their teaching style. In medical and mental health doctor offices.

But in government? Not so much. Experts are useful when they’re part of a range of experts advising, as employees, the government’s decision makers. But as government decision makers? Definitely not so much. For the lack of utility of that last role, it’s only necessary to look at the Fauci-Collins-led experts as bureaucrats, or at the experts of the John Brennan and James Clapper CIA and ODNI, respectively.

The Supreme Court was right when it greatly reduced Chevon Deference in its Loper Bright Enterprises v. Raimondo ruling, making clear that “experts” in government aren’t owed any particular deference on matters of government behaviors and decision-making.

So it is with emergent AI.

Who’s In Charge?

Posted on by
Reply

Is it a company’s leadership, ultimately hired by the company’s owners, the shareholders. or is it a couple of proxy advisers, whose income depends on being the ones consulted over management decisions?

Exxon Mobil, having grown fed up with the anti-business climate of New York, has put before its owners, its shareholders, the proposition that the company should go out from New York, move to Texas, and redomicile there.

The two largest Proxy Advisors aggregate to somewhere between 90% and 97% of the American proxy advisory market. The two, Glass Lewis and Institutional Shareholder Services, are pushing those shareholders to reject the move.

(Aside: they’re not even American companies. Glass Lewis, although headquartered in San Francisco, is owned by Peloton Capital Management, a Canadian company. Institutional Shareholder Services, although headquartered in Rockville, MD, is owned by the German company, Deutsche Börse AG.)

Their motive is obvious. Texas, for instance,

lets companies domiciled in the state require that investors hold at least $1 million in market value, or 3% of voting shares, for six months to submit shareholder proposals. Companies can also require shareholders to own at least 3% of shares to bring lawsuits for breaches of fiduciary duty and self-dealing.

A successful move to Texas would encourage lots more companies to leave States with high business taxes, excessive regulatory environments, and especially relevant to this context, a heavily advisor-permissive suite of regulations. This is a significant reduction in the “advisors'” ability to…influence…the companies they choose to target.

Who runs, then, Exxon Mobil: the shareholders or Glass Lewis and Institutional Shareholder Services?

Government Union Extortion

Posted on by
Reply

Five unions that operate the New York State-owned (through the Metropolitan Transit Authority) Long Island Rail Road went on strike—all 3,500 members—and stranded 300,000 residents, keeping from their jobs and errands. The strike lasted 3 days before the government capitulated and gave (I assume; the agreement parameters remain unreleased to the public) what these public unions demanded.

Never mind the baseline from which those union members were proceeding.

At $49.92 in wages before overtime, a Long Island Railroad engineer makes $103,000 per year. Even in an upscale city like Plano, Texas, on a relative cost of living basis, that works out to an equivalent annual income of $66,000 to live in Plano.

Significantly, the cost of commuting to/from work in Plano is more than 50% cheaper than in LIRR’s New York.

Yet the city allows this extortion to punish its residents because, well, the LIRR unions are all public unions, which is to say, run by the city.

Lawlessness Back in the Courts

Posted on by
Reply

Last fall, California voters passed Proposition 50, which authorized the California legislature, in a one-time good deal, to bypass the State’s voter referendum-mandated independent commission that was created for the purpose of drawing Congressional district boundaries in as politically neutral fashion as could be. Proposition 50 was passed though, based explicitly on this premise:

…the move was a political necessity: California, [supporters] said, could not unilaterally adhere to neutral redistricting standards while Republican-controlled states entrenched their own power through aggressive gerrymandering.

Prop 50 is now likely headed to the Supreme Court after the case wends its way through lower courts. Its opponents are centering their argument on the premise that the redrawn map relies too heavily on racial gerrymandering, which the Court has virtually outlawed with its Louisiana v Callais ruling.

There’s another reason, though, that the Court should overrule Prop 50, albeit it would be a more difficult case to make. That reason flows from the backers’ basic premise. The law creating the commission—at those voters’ demand and approval—says what it says, and there is no place in the text for setting aside neutrality whenever one or another political party does something the State’s legislature or governor doesn’t like.

The State should be held to what the law says, not what politicians want it to say. What makes this argument difficult to make in the Court, though, is that voters are allowed to change their minds, and this may be what California’s voters did last fall. The question would hinge on the underlying premise’s intrinsic disregard for then-extant law.

The racial gerrymandering beef itself will be hard enough to prove with the Court in Callais having also said that actual racial animus must be shown; relying on a racial component that’s merely a statistical byproduct of a move wouldn’t fly.

Disregarding our Constitution

Posted on by
Reply

Here they go again. This time it’s Virginia’s Progressive-Democratic Party-dominated legislature and Governor who think our Constitution is just something to be used or ignored at Party convenience and that, in the immortal words of a Leftist “journalist,” isn’t binding on anything and it’s hard to understand, being over 100 years old (or, as he later “corrected,” more than 200 years old.

This time, it’s Party’s disregard of our 2nd Amendment and of Supreme Court rulings holding that keeping and bearing Arms is an individual inalienable right of which a well regulated militia is a beneficiary not the purpose and that the keeping and bearing cannot (not just may not) be regulated except in consistence with our nation’s traditions. That last includes, explicitly, firearms that are in widespread lawful use—these cannot (not just may not) be restricted from our possession of them.

Virginia’s reigning Party has banned what it’s pleased to call “assault” weapons along with the 30-round magazines that are an integral part of the semi-automatic rifles that are subject to the ban. This is in direct and deliberate violation of our 2nd Amendment and is a nose-thumb at our Supreme Court.

This miscarriage is now in both Federal and State courts, looking to get this blatantly unlawful Party gun grab tossed. It should, in the end, be tossed, but honest citizens shouldn’t have to spend the time or treasure going through this.

It’s time to remove this lawless Party from the halls of political power at the next election and in subsequent election cycles.