Tag Archives: political economy

In Which the 9th Gets One Right

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Facebook’s use of the output of its facial recognition software—imagery of individuals’ faces—without those individuals’ prior permission can be contested in court, according to the Ninth Circuit.  Facebook had demurred when the case was brought.

On Thursday, the US Court of Appeals for the Ninth Circuit rejected Facebook’s efforts to dismiss the ongoing class-action lawsuit, which could potentially require the company to pay billions in compensation.
The lawsuit dates back to 2015 when three Facebook users living in the state [Illinois] claimed the tech giant had violated the Illinois Biometric Information Privacy Act, which requires companies to obtain consent when collecting their biometric information.

Judge Sandra Ikuta, writing for the court, wrote:

We conclude that the development of a face template using facial-recognition technology without consent (as alleged here) invades an individual’s private affairs and concrete interests.

Yewbetcha.  However, the courts, ultimately, the Supreme Court, need, in the end, to rule decisively that no company gets to steal a man’s personally identifying information—which his face assuredly is in this day of highly accurate facial recognition software—and theft is what it is when the data are taken without permission.

It’s even worse when these data, these facial recognition image outputs, are monetized for the benefit of the company in question with that done behind the individuals’ backs, too.

The Roll of Central Banks

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In his piece about Brexit and the UK’s second quarter contraction, Paul Hannon wondered about the role of central banks generally in keep[ing] the global economy growing if trade disputes escalate. Can they even do so, he asked.

I say the question is a non sequitur. It’s not up to central banks to keep the global economy growing. It’s each central bank’s job to maintain stable prices in its respective nation. Central banks certainly can coordinate their actions with each other, but that can be done legitimately only with each bank’s own national interests in mind, not those of any other nation or collection of them.

If central banks stick to that simple (and not so simple) task, their respective nations’ economies will have a better chance of staying healthy and growing, and that will aggregate to a healthy and growing “global” economy.

Against that, trade disputes are relatively minor bumps.  Economic wars, such as the one the PRC has been waging against the US and against the West generally for decades, are much more serious threats to the global economy and to individual national economies, but that doesn’t alter in the slightest the responsibility of national central banks.

Nice Things

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President Xi Jinping and his cronies in the People’s Republic of China government look like they’re settling in for a long trade war with us. The claim, too, is that deteriorating relations with us, and allowing them to deteriorate further, are a sign of Xi’s strength as a leader of the government and of the Communist Party of China.

This misunderstands, though: those deteriorating relations are a good illustration of Xi’s weakness as a leader, not his strength. It takes strength, mind you, to be willing to change course when the chosen one proves…inopportune.

There’s this, too, from Shi Yinhong, Director of the Center on American Studies at Renmin University in Beijing:

Trump’s actions have seriously agitated the Chinese leadership, who now realize that there’s no chance of reaching a fair deal with the US.

Right.  Because it’s unfair of us to demand the PRC stop stealing our intellectual property and our technological secrets. It’s unfair of us to object to the PRC extorting tech transfers and domestic “partnerships” and requiring backdoors into proprietary operating software, all as a condition of doing business in the PRC.

Even the PRC’s wartime decision to devalue its currency, intended to counter the effect of tariffs on its exports to the US, cannot work well over the intermediate- to long-term. That devalued currency serves to make imports into the PRC—things like oil and natural gas both as energy for production and as fuels for home heating, transportation, marine shipping and things like components for assembly into larger components or finished products in PRC factories—more expensive, it lowers the return on US and other dollar-denominated debt instruments, and through those, it drives up the cost of domestic products that depend on those imports.

It also encourages capital flight into a host of suddenly more valuable currencies—primarily dollars, but yen, won, euros, and pounds, also.

And: whether tariffs cost us more than the PRC’s counters cost them remains to be seen. However, that’s not a matter that can be assessed solely in dollars or yuan. Our economy is much larger, wealthier, and more diverse than is the PRC’s; we can absorb more such costs than it can.  And I haven’t gotten to the costs of military buildups.

Finally, there’s this on the PRC’s trade war: as companies continue to move their supply chains away from the PRC in response to the stress of this war, as sellers (including farmers) find other markets than the PRC for their goods and services (and crops), the PRC’s war is weaning these enterprises off the PRC market, which can only work to the PRC’s long-term detriment.

All of this illustrates why the good citizens of the PRC can’t have nice things.

Overreactive “Professional” Investors

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Some folks think Fed President Jerome Powell is “in over his head” in terms of communicating Federal Reserve Bank policies to the general public (read: to “professionals”).

Here’s Krishna Memani, OppenheimerFunds Inc’s Vice Chairman of Investments:

As a central banker, you don’t want to give people the opportunity to interpret things how they want to[.]

This is backwards. The Central Banker—Powell—says what he says, and he does so clearly in today’s improved environment over the last century’s deliberate obfuscation in that era’s misguided attempt to avoid confusion.  It’s on “people”—professional investors—to take Powell at his words and not interpret things “how they want to,” or desperately over-parse them, or look for meanings hidden in backward-playing recordings of his statements

Investors must act only on what he actually says.

Better is the Enemy of Good Enough

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In the aftermath of Boeing’s failure with its 737MAX, the FAA—and foreign jurisdictions—are on the verge of entering that larger failure regime.

As Boeing Co and safety regulators push to complete long-awaited fixes for 737 MAX jets, testing has expanded to cover increasingly unlikely emergencies including potential computer failures pinpointed by overseas authorities, according to US government officials briefed on the details.
The broader risk analyses and simulator scenarios, some details of which haven’t been reported before, show the lengths to which leaders of the Federal Aviation Administration, in coordination with their foreign counterparts, are going to verify the safety of the MAX fleet before allowing the planes to fly again.

And one thing that is not being addressed in the lengths to which these leaders are going is the adequacy of training that pilots are required to undergo to receive certification.  Instead, excuses are offered.

Ali Bahrami, the FAA’s top safety official, told a Senate subcommittee during a hearing that the June tests “identified a very remote failure case,” adding that FAA pilots decided “the level of proficiency that is required to recover from this event was exceptional” and could overwhelm average airline crews.

Which raises two questions. One is how “very remote,” and when does that criterion cross the Better-Good Enough line?

The other (stipulating that line is not crossed here) is why “average airline crews” would be so inadequately trained?  Where, too, are pilots trained to disconnect from the computers, and disconnect the computers from the aircraft, and go manual? And: what is the adequacy of the manual backups?

In the end, though, demanding Better before going to production too often prevents going to production.  Demanding perfection first—rather than questing after it (or merely after Better) constantly and iteratively while iteratively producing the outcome of those quality iterations—prevents serious efforts to produce.