Tag Archives: economics

Cybersecurity

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A quick thought on this threat to our personal financial wellbeing, our companies’ wellbeing, and our collective wellbeing.  The Wall Street Journal ran an article on the subject earlier in the week, and this bit jumped out at me [emphasis added].

To better understand how far we have to go in creating a cybersafe culture, consider this: if you were taking a tour through a nuclear plant, and there was a big red valve with a sign on it that said “Do not touch,” how many of you would turn it? None, I would guess. But in a phishing test conducted at a major financial-services firm, one of the test emails actually said: “This is a Phishing Test. Clicking the link below will cause harm to your computer.” At least one executive clicked it! When asked why, he said, “I was curious to see what it would do.”

That executive should have been fired, for cause, on the spot.  It’s too bad the author of the article didn’t identify the company; if that executive still works there, that would be a financial services firm that shouldn’t get anyone’s business; the company will have demonstrated that it won’t take seriously its obligation protect its customers’ personal financial data—or the monies customers might actually place with it.

An Argument

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…for leaving the European Union altogether.

By openly invoking the role of investors, financial markets and the defense of the eurozone in his speech on Sunday, the president [Italian President Sergio Mattarella] lends credence to the populist argument that Italy has become the battleground in a war between the international establishment and national democracies. Even if populists win the elections, their supporters believe, they will never be allowed to hold power for fear that they would oppose the dogma that dominates the eurozone.

That speech was his rationalization for his decision to block the coalition of the two parties who one the last national elections from forming a government.  With that speech, he demonstrated the fact of the Italian peoples’ belief.

And this from European Commissioner for Budget and Human Resources Günther Oettinger:

…markets will teach Italians how to vote….

And German Chancellor Angela Merkel’s

comparison between Italy and Greece is an unveiled threat: Italians had better toe the line, or they will not be spared what the Greeks have been going through.

The Wall Street Journal‘s editors have this one right.

[W]hat is happening in Rome is not only about the future of the euro. It has also to do with the state of democracy, in Italy and in Europe. Discussing and questioning the governance of the eurozone, as the Italian right-left populist coalition wished to do, should not be a taboo in mature democracies.

But national sovereignty be damned, and to hell with democracy and what petty voters want.  That’s the elitist EU attitude.  The worthies of EU governance Know Better.

This is what the Italian people need to think very seriously about in the coming national elections.

Europe’s Italian Crisis

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Europe is a-roil over Italy’s inability to form a government at any time since the nation’s elections some months ago.  And so is the old guard in Italy.

Italy’s woes rippled across the eurozone, driven by investor worries that an exit by the bloc’s third-largest economy could force others out.

Bank of Italy Governor Ignazio Visco said this with a straight face:

We must never forget that we are only ever a few short steps away from the very serious risk of losing the irreplaceable asset of trust[.]

They’re risking losing that trust, anyway, on the political front—from which flows all economic trust.  The Italian Old Guard is in the way here.

Italian President Sergio Mattarella blocked the formation of a euroskeptic coalition government formed of the antiestablishment 5 Star Movement and the League parties, raising the prospect of new elections.

He perpetrated the decidedly anti-democratic move of refusing to allow a coalition of the two parties who won the election to form a government because he personally didn’t like their finance minister nominee.  I would have thought Italy would have had done with fascism.  And so, sub rosa, would many in Europe, it seems.

And there’s this, based in no small part on those erstwhile coalition parties’ shared lack of enthusiasm for eurozone membership:

Italy hurtled toward a political crisis that is reigniting debate over Europe’s future, including whether the eurozone’s third-largest economy should remain in the currency union.

They’re worried that an Italian exit—if it actually were to happen—would spell the end of the currency union altogether.

Which brings me back to that matter of trust.  Having blocked the formation of a government, Matarella has virtually guaranteed new elections soon—there are no other possible combinations of Italian parties capable of forming a governing coalition.  And those new elections, given who won the last round, will surely be less an election of a new government and more a national referendum on whether Italy should remain in the eurozone.

Of course, Italy should not; they’re a terrible match for that currency union.  Italy, along with Portugal, Greece, and Spain—the original PIGS—should form their own currency union.  Those four nations’ philosophies concerning the purpose of money and of government’s role in society are much closer to each other’s than they are to the rest of Europe’s.

Australian Trade with the PRC

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Australia is finding much of its exports to the People’s Republic of China piling up in PRC ports (Australian wine is the proximate subject of the WSJ piece at the link)—not because the customers no longer want them but because the PRC government objects to Australian policies designed to limit PRC meddling in Australian domestic affairs.

From that, there’s this remark by Rob Taylor, the piece’s author:

Australia faces an awkward diplomatic balancing act in trying to address concerns about political interference while relying heavily on China for its economic well-being.

Stop being dependent on the PRC for trade. It’s as dangerous to be dependent on a single trading partner as it is for a business, or a nation, to be dependent on a single product.

There are lots of other markets around the world—and throughout Asia—for Australian goods and services. It’ll be expensive for Australia to wean itself off the PRC, but the payoff will be well worth it.

Other nations doing business with the PRC should consider the same weaning. After all, what’s the value of a large potential customer base when its government uses that connection for an economic Anschluss?

Out of Touch?

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President Donald Trump signed three Executive Orders impacting public service unions.  One of interest to me is this one.

The third restricts how much on-the-job time federal employees can spend on labor-union duties.

Naturally, the unions management teams are in an uproar over the requirement to have their members spend their work time…working.

Time an employee spends on union activities is time not spent on the work for which the employee was hired.  Union activity work is an additional duty requested by the union; it needs to be done entirely on the employee’s own time.  This restriction is a good start, but the union task time needs to be eliminated altogether from the employee’s work time.  The Federal government—all employers, come to that—hire individual workers, they don’t hire unions.  Unions aren’t temp agencies that provide workers.

Aside from that, this is just a variation on featherbedding.  Time committed to union activities during an eight-hour work day often runs to three hours.  If the work needed can be done in five hours, rather than eight, by the current subset of employees who are committed to union tasks as well as employer work, this suggests that the work required, if done exclusively, can be done with as much as 37% fewer such (union) employees.

Is public service union management out of touch?  No, just privileged.