Tag Archives: economics

Private Enterprise and Social Media

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In one of The Wall Street Journal‘s frequent debate articles, this time about whether businesses should allow employees to use social media at work, a couple of comments made by the pro-use debater jumped out at me.

When I first began helping companies use Twitter and Facebook more than a decade ago, every organization started with this question: how can we use social media without compromising our security and privacy obligations?

The answer to this question seems straightforward, yet the debater equivocated.  While a business needs access to social media for its advertising and other communications with current and future customers, the plain fact, made all the more plain with recently revealed misbehaviors of Facebook and Twitter, is that businesses cannot use social media without severe risk of compromising their security and privacy obligations.  The business models of social media like Twitter and Facebook depend on exploiting exactly those privacy data, and those enterprises—and not only Twitter and Facebook—have shown themselves incapable of maintaining security regarding those data.

And this one:

The same kind of risk/benefit assessment applies to the use of personal social-media accounts by employees.

While it is true that companies can reduce risk if they ban personal social-media use during business hours, discourage employees from making any online references to their work and maybe even ban personal smartphones from the workplace, that is a terrible idea for the same reason companies now embrace social-media marketing: you can’t be a successful company in the social-media era unless you accept some level of social media-related risk.

This is just flat wrong.  In the first place, there’s no reason at all an employee should be conducting personal business on company time and company equipment.  Normal breaks and lunch hours answer the first part, but it’s still company equipment.

More importantly, the claim of no success without employees on social media is wrong.  I worked for one of the most successful defense contractors in the world in our niche of the industry.  Along with hundreds of fellow employees I worked behind a cipher lock.  No radios (and so no cell phone), no personal tablets or laptops or the like, we were air-gapped from the Internet.  We survived the isolation.  In fact, we thrived in that environment, and so did our company.  Companies that don’t do classified work still do proprietary work.  There’s no more need for those employees to access the Internet than there was for us.  They’ll thrive, too.  Saying a business just must surrender and accept social media-related risk is nothing but a quitter’s attitude.

And: any company is better off operating short-handed than operating with an employee who will put the company at risk with his own security errors, especially if those errors flow from doing personal business on company time or equipment.

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?