Gone Fishing
Just because you can do something doesn't mean you should do it.
US government coerces private companies into disclosing trade secrets.
Now, when the Administration wants to destroy those documents, these same civil servants are suing to prevent this destruction arguing that it would make future prosecution more difficult.
Also, the argument that the Administration should not be able to investigate CFPB practices because it would expose the trade secrets of private companies is a bit rich, even for them.
‘Lorelei Salas, who until recently was the CFPB’s director of supervision, said the bureau kept “very sensitive trade secret information” including from digital payments services. “We have information on the secret sauce of the credit models that people used with artificial intelligence to make decisions about whether you get a loan or not,” she said.
‘Ms. Salas and other former CFPB executives reiterated this in a CBS News “60 Minutes” episode that aired last Sunday. “I think that companies that gave us their financial information and even trade secrets, they will probably be harmed if that information fell into the hands of competitors,” Ms. Salas said, adding that companies will “not be pleased.”
‘No, they wouldn’t. But Ms. Salas makes it sound as if companies voluntarily gave the CFPB their records and algorithms. They didn’t. CFPB employees issued sweeping legal summonses, which are known as “civil investigative demands,” in search of business wrongdoing, such as potential disparate impact of algorithms against minorities.’
How Government and Markets Built America Together
Some people are confident that the success in taming the Wilsonian progressive experts will be ephemeral.
The obstacles are formidable.
‘Second, while the commitment to government and markets has ebbed and flowed, substantial government has never been absent from our political economy. In eras during which the country preferred markets, government was still there undertaking its basic functions of investing in market infrastructure, policing market behavior, and maintaining an economic safety net. Those functions date to the beginning of the country at least in an elementary form. As the economy has grown and changed, the country has added new or revised programs to those three fundamental functions, sometimes incrementally and sometimes significantly by expanding government, as in the New Deal and the Great Society eras.’
The Unbearable Lightness of the Unitary Executive Theory
Just because something is in the statute doesn’t make it constitutional.
We’re about to find out if that statement is true in the context of the so-called independent agencies.
‘Through the unlawful firing of National Labor Relations Board member Gwynne Wilcox and a February 18 executive order, entitled “Ensuring Accountability for All Agencies,” President Donald J. Trump is trying to eliminate the independence of independent regulatory agencies. These are the multi-member agencies, such as the National Labor Relations Board, the Federal Trade Commission (FTC), and the Federal Communications Commission, whose members are protected by statute against being fired without good cause. The relevant statutes typically provide also that members will serve specific terms and that neither major party can hold more than a bare majority of seats.’
A $20 Billion Slush Fund—Paid by You to Progressive Nonprofits
Are we just seeing the tip of the iceberg on the NGO-as-slush-fund-for-my-friends phenomenon?
‘The Department of Justice is investigating the Greenhouse Gas Reduction Fund, a $27 billion program that was part of Joe Biden’s $740 billion Inflation Reduction Act. Created in the spring of 2023, and managed by the Environmental Protection Agency, the fund was supposed to be a “first-of-its-kind” program to address the climate crisis while revitalizing communities that it considered “historically left behind.”
‘But it appears little of the $27 billion revitalized anything—except the coffers of a range of environmental nonprofits associated with former Obama and Biden administration officials.’
Doge snaps at the ankles of government consultants
There’s an apocryphal story about Musk immediately after his acquisition of Twitter. He wanted to cull an unnecessary data center. The old Twitter pros wanted to study the problem. Frustrated by what was either intransigence or incompetence (or both), he investigated the situation for a few hours. Then, he went to the offending facility, asked his bodyguard for a knife, and cut the main line himself. Twitter was unaffected.
Let’s see what kind of effect cutting the line on these consulting projects does to the federal government.
‘Not all government contracts are equally vulnerable. Those that the GSA is reportedly looking to cull are so-called Oasis contracts that cover professional services such as management and consulting, engineering, logistics and financial services.
‘This means companies that focus on technology-centric services such as cyber security or artificial intelligence should be less affected. Palantir Technologies — the AI-powered data analytics firm co-founded and chaired by Peter Thiel, a longtime Musk associate — may be a case in point. Palantir specialises in defence, and got 42 per cent of its revenue from the US government last year. The stock has doubled since November, despite a recent sell-off.’
The Kill-or-Be-Killed Fight for Crypto’s Future
Regulation is a weapon.
‘The fight is over the future of the $3 trillion crypto industry. The pro-crypto Trump administration is meant to usher in a golden age for the sector, and on Sunday, Trump announced the formation of a crypto strategic reserve. But in reality, the call to bring crypto into the mainstream through government regulation has opened up a kill-or-be-killed battle among crypto players. Laws, while expected to be broadly friendly to the industry, could be devastating for individual players such as Tether if they are on the wrong side of new rules.
‘Allaire has encouraged the U.S. and other governments to pass laws that ban the use of Tether’s tokens, which are issued offshore. One such law fully took effect in the European Union in December, and similar bills have been introduced in the U.S.’
America Still Needs a Covid Reckoning
The irony will be if DOGE ends up increasing trust in the Administration.
‘To understand why the pandemic finally forced us to address institutional failure, we must acknowledge the facts. The virus didn’t cause lockdowns. Human beings decided to impose lockdowns, which failed to stop the deaths and the spread. Lockdowns inflicted massive damage on children and literally killed people. A review of 34 countries with available data found that through July 2023 “the US alone would have had 1.6 million fewer deaths if it had the performance of Sweden.” A January 2023 paper in the Journal of Economic Dynamics and Control estimates that over the next 15 to 20 years, unemployment alone will cause 900,000 to 1.2 million additional American deaths—from the lockdown, not the virus.
‘More than massive incompetence by bureaucrats, more than a lack of critical thinking, we saw a failure of society’s moral and ethical compass so pervasive that we have lost trust in most institutions and leaders—trust that is essential to the function of any free and diverse society.’
Quantifying the Impact of DOGE and Tariffs on GDP and Inflation
The prior Administration distorted the economy in many ways. Beyond the tidal wave of stimulus to cover up functional weakness, a wildly disproportionate number of new jobs were government jobs. How many of these were necessary? How many of these were merit hires?
‘About 25% of jobs added in the US economy over the past two years were government jobs, up from 5% in 2021 and 7% in 2022, see chart below.’