Project 2025: Managing the bureaucracy
The Schedule F controversy is turning into a debate. Here’s a rebuttal to Trump’s proposed moves to fire civil servants who make policy and make these into political appointments. The authors claim that this is a return to the patronage system.
But, shouldn’t the President be able to control the determination of policy as the head of the executive branch?
The debate is really about where the line is. By logical extension, could we make the case that we should be governed entirely by an army of experts without the governance of elected officials?
‘That’s right. Civil servants could be dismissed not because they are underperforming, but because they are unfaithful to a particular president. And who would slide into those vacant positions? Patrons, backers, loyalists of the president — precisely those folks who were chased from their jobs by the Pendleton Act, the Carter and Reagan initiatives, and the Obama examination. Patronage, to the authors of the Project 2025 report, appears to be bad in theory only.’
Microsoft Hit With EU Antitrust Charges Over Teams
Microsoft accused of tying. Again.
‘The European Commission, the bloc’s antitrust enforcer, said Tuesday it has informed Microsoft of its preliminary view that the company broke antitrust rules by tying Teams to popular productivity offerings that include Microsoft Word and Excel. The commission said Microsoft may have given Teams an advantage by not giving customers a choice about whether they would get access to the software when subscribing to other products.’
Surgeon General Declares Gun Violence a Public Health Crisis
If at first you don’t succeed, then try, try again. What are the chances that this declaration affects the people doing the violent things?
‘The U.S. surgeon general, Dr. Vivek Murthy, on Tuesday declared gun violence in America a public health crisis, recommending an array of preventive measures that he compared to past campaigns against smoking and traffic safety.
‘The step follows years of calls by health officials to view firearm deaths through the lens of health rather than politics.’
Federal Reserve Floats Weaker Version of Planned Bank-Capital Overhaul
The Banks are getting their way with a massive reduction in the Tier 1 capital increase under Basel 3. This whole move was in response to the failure of SVB and of Signature Bank, collapses that should have been preventable under the then-extant regime. It’s always more rules, more complexity. Complexity does not make things safer.
‘The Federal Reserve has shown other US regulators a three-page document of possible changes to their bank-capital overhaul that would significantly lighten the load on Wall Street lenders, according to people familiar with the matter.
‘The revisions would walk back key parts of the landmark proposal — including one that might have had a large effect on big banks with sizable trading businesses, said the people, who asked not to be identified discussing details that aren’t public.
‘The Fed document doesn’t include an updated estimate on how much additional capital that large banks would have to hold as a cushion against financial shocks. But the people said early calculations suggest the proposed changes could lead to an increase as low as 5%. The original version called for an overall 16% hike.’
Two Rare Texas Cavefish Proposed for Listing Under Endangered Species Act
This is certainly one way to end the shale drilling phenomenon. Is this passive-aggressive regulation? It’s all about the fish that nobody can see, man? Why do you hate the fish? Hat tip to Doomberg for highlighting this.
‘The U.S. Fish and Wildlife Service today announced a proposal to list the toothless blindcat and widemouth blindcat, two cave-dwelling catfish species from the San Antonio segment of the Edwards Aquifer in Bexar County, Texas, as endangered under the Endangered Species Act (ESA).
‘After reviewing the best available science, the Service finds that both of the “blindcats” are in danger of extinction throughout their range due to mortality from uptake by groundwater wells.’
Delivery Drivers Got Higher Wages. Now They’re Getting Fewer Orders.
It always seems as if regulators have a partial equilibrium way of thinking. If we mandate higher wages, then workers will be paid more. Well, not exactly. It’s more like, if we mandate higher wages, some workers will be paid more and other workers will be paid zero. If you manage to keep your job, you’re golden. If not, go do something else (and hopefully you won’t take too much of an earnings hickey).
‘Food-delivery apps have responded to cities’ new wage-increase requirements for gig workers by ratcheting up fees. Now, they are contending with frustrated consumers, plunging restaurant orders and an exodus of delivery drivers.’
7th Creative Bureaucracy Festival in Berlin with Record Attendance
Innovation in bureaucracy is always about new ways to add more. The true innovation would be how to remove things that aren’t working or that are counter-productive. I don’t suppose they have awards for that. What would you even call that kind of creative destruction?
‘Innovations in the public sector are drivers for a strong democracy. Cooperation, creativity and capacities for cross-sectoral agile learning are essential for sustainable administrative innovations and successful social transformations. The 7th Creative Bureaucracy Festival ended with this conclusion and a plea for more intersectoral learning, trust, courage and confidence between politics and society.’
Companies Face New Normal of Tariffs, Trade Regulation Compliance
The problem for supply chain managers is policy volatility. It’s hard to make plans when the ground is shifting. Government intervention is now perceived to be a critical problem for supply chain managers.
‘Certainly, supply chain managers are worried. In the Lehigh Business Supply Chain Risk Management Index Report for Q3 2024, government intervention had surged to the number two concern for supply chain managers, after cybersecurity. The Index, which was developed by the Center for Supply Chain Research at Lehigh University and the Council of Supply Chain Management Professionals, noted the perception of this risk was now the highest it has been in four years, reflecting managers' worries about tariffs, trade wars, and regulatory restrictions on source materials, methodologies or technologies. “This risk is always increasing. Russia is especially worrisome,” the authors said, adding somewhat alarmingly, “The geopolitics in Europe are similar to 1939.”’
The Two-Class System of Regulation Plaguing Europe
It often seems that Fintech is nothing more than regulatory arbitrage. In fairness, the pace of innovation is much faster than the pace of regulation. It will catch up eventually. Things fall through the cracks, until they don’t. Here, there is a discrepancy between the regulation of non-custodial digital asset service providers and custodial ones in terms of requirements for anti-money laundering compliance. It’s just a matter of when, not if.
‘A core debate is whether non-custodial providers should be subject to AML laws. The Financial Action Task Force (FATF) recognizes the potential illicit risks of DeFi, while the EU proposal excludes these entities, leaving gaps. Similarly, the European Banking Authority’s (EBA) guidelines also emphasize the AML risks associated with Crypto Asset Service Providers’ (CASPs) transactions. Specifically, the EBA points out the risks linked to transactions involving transfers to or from self-hosted addresses, decentralized platforms, or transfers involving providers of crypto-asset services that are not authorized or regulated.’