Daily Archives: January 7, 2021

Was it a coup? No, but siege on US Capitol was the election violence of a fragile democracy

By Clayton Besaw and Matthew Frank – Did the United States just have a coup attempt?

Supporters of President Donald Trump, following his encouragement, stormed the U.S. Capitol building on Jan. 6, disrupting the certification of Joe Biden’s election victory. Waving Trump banners, hundreds of people broke through barricades and smashed windows to enter the building where Congress convenes. One rioter died and several police officers were hospitalized in the clash. Congress went on lockdown.

While violent and shocking, what happened on Jan. 6 wasn’t a coup.

This Trumpist insurrection was election violence, much like the election violence that plagues many fragile democracies.

The uprising at the Capitol building does not meet all three criteria of a coup.

Trump’s rioting supporters targeted a branch of executive authority – Congress – and they did so illegally, through trespassing and property destruction. Categories #2 and #3, check.

As for category #1, the rioters appeared to be civilians operating of their own volition, not state actors. President Trump did incite his followers to march on the Capitol building less than an hour before the crowd invaded the grounds, insisting the election had been stolen and saying “We will not take it anymore.” This comes after months of spreading unfounded electoral lies and conspiracies that created a perception of government malfeasance in the mind of many Trump supporters.

Whether the president’s motivation in inflaming the anger of his supporters was to assault Congress is not clear, and he tepidly told them to go home as the violence escalated. For now it seems the riot in Washington, D.C., was enacted without the approval, aid or active leadership of government actors like the military, police or sympathetic GOP officials. more>

Updates from ITU

Towards environmental efficiency in the age of AI
ITU – The rapid adoption of artificial intelligence (AI) and emerging technologies has sparked the need for a sustainable approach able to safeguard the environment. A recent ITU workshop provided a platform to discuss environmental efficiency in the age of AI, increasing automation, and smart manufacturing.

The workshop discussed emerging technologies’ potential to contribute to climate action as part of global efforts to achieve the UN Sustainable Development Goals. It also highlighted practical tools to evaluate environmental aspects of emerging technologies and discussed the role to be played by international standardization in supporting the expansion of this toolkit.

The workshop’s discussions fed into a meeting of the ITU Focus Group on environmental efficiency for AI and emerging technologies (FG-AI4EE). The group is analyzing the relationship between emerging technologies and environmental efficiency to benchmark best practices and provide a basis for new ITU standards. “This focus group is among the first global platforms for the environmental aspects of emerging technologies,” noted Paolo Gemma, Huawei, Co-Chair of the Focus Group.

The Focus Group is open to all interested parties. Sign-up as a participant and join the mailing list on the homepage. For more information, contact tsbfgai4ee@itu.int. more>

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Updates from McKinsey

Derisking digital and analytics transformations
While the benefits of digitization and advanced analytics are well documented, the risk challenges often remain hidden.
By Jim Boehm and Joy Smith – bank was in the midst of a digital transformation, and the early stages were going well. It had successfully transformed its development teams into agile squads, and leaders were thrilled with the resulting speed and productivity gains. But within weeks, leadership discovered that the software developers had been taking a process shortcut that left customer usernames and passwords vulnerable to being hacked. The transformation team fixed the issue, but then the bank experienced another kind of hack, which compromised the security of customer data. Some applications had been operating for weeks before errors were detected because no monitors were in place to identify security issues before deployment. This meant the bank did not know who might have had access to the sensitive customer data or how far and wide the data might have leaked. The problem was severe enough that it put the entire transformation at risk. The CEO threatened to end the initiative and return the teams to waterfall development if they couldn’t improve application development security.

This bank’s experience is not rare. Companies in all industries are launching digital and analytics transformations to digitize services and processes, increase efficiency via agile and automation, improve customer engagement, and capitalize on new analytical tools. Yet most of these transformations are undertaken without any formal way to capture and manage the associated risks. Many projects have minimal controls designed into the new processes, underdeveloped change plans (or none at all), and often scant design input from security, privacy, and risk and legal teams. As a result, companies are creating hidden nonfinancial risks in cybersecurity, technical debt, advanced analytics, and operational resilience, among other areas. The COVID-19 pandemic and the measures employed to control it have only exacerbated the problem, forcing organizations to innovate on the fly to meet work-from-home and other digital requirements.

McKinsey recently surveyed 100 digital and analytics transformation leaders from companies across industries and around the globe to better understand the scope of the issue. 1 While the benefits of digitization and advanced analytics are well documented, the risk challenges often remain hidden. From our survey and subsequent interviews, several key findings emerged:

  1. Digital and analytics transformations are widely undertaken now by organizations in all sectors.
  2. Risk management has not kept pace with the proliferation of digital and analytics transformations—a gap is opening that can only be closed by risk innovation at scale.

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Updates from Chicago Booth

How central bankers misjudge forward guidance
By Rose Jacobs – One of the best ways to spur an economy is to get people spending, and policy makers have a number of tools to do that. Yet growing evidence suggests a favored approach of late—forward guidance by central banks—doesn’t work. Such guidance, usually focusing on the outlook for interest rates, is meant to make clear to consumers that prices are likely to rise soon, so buying big items now would be smart.

While people may agree with the buy-now logic, they still may not react as economists and policy makers expect, according to Boston College’s Francesco D’Acunto, Karlsruhe Institute of Technology’s Daniel Hoang, and Chicago Booth’s Michael Weber. That’s because they don’t understand the signal, the researchers find.

“If you’re an economist too much stuck in your model world, this is very surprising to you,” Weber says. On the other hand, he acknowledges that not everyone can follow the logic chain that leads from a central banker predicting depressed interest rates, to lower borrowing costs, to higher inflation, to the urgency of buying now. “If you’re not too detached from reality, it’s not surprising,” Weber says.

The researchers analyzed two events in which governments or central banks signaled that prices were set to rise. One was a 2005 announcement by the German government that the country’s value-added tax (similar to the US sales tax) would increase from 16 percent to 19 percent in 2007. The second was a 2013 statement by then European Central Bank president Mario Draghi that interest rates would stay low or decline further for some time. To economists, this statement was a clear signal that price inflation would soon follow. more>

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