Tag Archives: economics

In Which I Disagree with Jason Chaffetz

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A little bit. Chairman of the House Committee on Oversight and Government Reform Jason Chaffetz (R, UT) led a letter to President Barack Obama in which he and 17 other Congressmen called for OPM Director Katherine Archuleta and OPM Chief Information Officer (CIO) Donna Seymour to be fired.

My disagreements are two. Chaffetz, in his letter, said

Director Archuleta and her leadership team failed to correct serious vulnerabilities to OPM’s network and cybersecurity posture….

He said much the same thing about Seymour. This was no failure to correct, though. These are two highly intelligent women, at the pinnacle of their careers whose talents have taken them to upper reaches of our Federal government. They knew what they were doing and not doing. They chose not to correct the vulnerabilities and security.

My second point of disagreement is this. Chaffetz closed his letter with this request of Obama:

Therefore, we respectfully request that you address this serious issue by removing Director Archuleta and Ms. Seymour from their positions.

That’s inadequate. Archuleta’s and Seymour’s number twos in their respective offices also knew what was going on and what was not being done, as did Archuleta’s and Seymour’s senior staffs. Those folks condoned the inaction by their decision not to scream bloody murder about their boss’ decisions not to act. Judgment like that cannot be acceptable in such positions; those people should be fired, also.

There is one point on which I do agree with Chaffetz most definitely. These two…officials…and their number twos, and on down the respective senior staffs, should be fired. Not allowed to resign, not allowed to retire—fired.

It’s Really Not That Hard

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Greek Prime Minister Alexis Tsipras’s unexpected announcement in the early hours of Saturday that Greece will hold a referendum on July 5 on the bailout conditions creates a severe headache for ECB President Mario Draghi and the rest of the bank’s 25-person governing council. The ECB faces a choice between maintaining ample liquidity support for Greek banks and potentially undermining the ECB’s credibility as a rules-based institution, or forcing the closure of Greek banks and enraging Greece’s government and people.

But wonks and misconceptions do add to the artificial complexity of the thing.

Capital controls will not, of necessity, force Greece’s banks to close. Certainly, the weakest of them may close, but weak businesses should be allowed to fail. Nor are capital controls, of necessity, bad things themselves. To the extent they work—a matter of structure and enforcement, not a matter of controls qua controls—they’ll keep cash in the cash-starved country.

Nor would Draghi’s decision force anything onto the Greeks. Greece’s current strait is solely the result of Greek behavior over the years, including their post-global panic refusal to take seriously the need to reform their high-spending, high-taxing ways. An ECB decision to stop the lending would serve only to acknowledge a failure already in place.

Of course, the ECB must stop making short-term loans—loans it can have no expectation of being repaid—to the Greek central bank. Propping up, with what are really grants from the taxpayers of the rest of the eurozone, those banks that are, in turn, propped up by the Bank of Greece does nothing at all to solve the underlying economic and national debt (and so economic) problems faced by the Greek government and the people who elected it.

This is simple. The only thing hard about it—and it is a hard thing—is finding the political will to do the right thing when that thing is an unpleasant thing to do.

Paying Ransom

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President Obama on Wednesday announced a new US government policy for dealing with Americans who are kidnapped abroad, and as always he stressed compassion for the hostages and their families.

Compassion? Where’s Obama’s compassion for the kidnap victim, who’s exposed to further kidnapping, since snatching him clearly pays off? Where’s Obama’s compassion for other Americans, now at increased risk or kidnapping themselves, by ransom paying that is nothing more than aiding and abetting the criminals/terrorists masqueraded as “compassion?”

…a government-wide review of US hostage policy, which has drawn criticism for inconsistency and lack of coordination. “The families of hostages have told us—and they’ve told me directly—about their frequent frustrations in dealing with their own government: How different departments and agencies aren’t always coordinated,” Mr. Obama said[.]

Those departments also don’t inform very much, if at all, the victim’s families of the status of efforts to get the victim back. The right answer, though, is not to reward the kidnappers for their efforts but to create consistency and coordination—and to summarily fire those bureaucrats who fail at this—and to pass information freely and on demand to the victims’ families. Certainly, many efforts are and should remain secret, but in those events, swear the families to secrecy—they need to be inside the loop, not outside of it.

The SEC and Judges

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The SEC doesn’t like it when the ones it charges with miscreancy object to the cases being heard solely by SEC administrative judges. One statement in particular in the WSJ article at the link, though, jumped out at me.

The SEC accused several defendants of “judge shopping” by trying to get a case heard in a particular court and in another instance asked one of its own judges to submit a formal statement about whether he has ever felt pressure to favor the agency.

Never mind that the SEC is demanding that defendants use the SEC’s own already shopped-for judges. Never mind, either, the SEC’s cynicism in trotting out one of its employees to speak favorably about that employee’s employer.