Tech Law Journal Daily E-Mail Alert
August 30, 2005, 9:00 AM ET, Alert No. 1,204.
Home Page | Calendar | Subscribe | Back Issues | Reference
Greenspan Discusses Innovation and Free Trade

8/27. Alan Greenspan, Chairman of the Federal Reserve Board, gave a speech on August 26, 2005, in Jackson Hole, Wyoming, in which he discussed the importance of innovation, new technologies, creative destruction, and free trade for economic growth and resilience.

Alan GreenspanGreenspan (at right) stated that "In recent years, the U.S. economy has prospered notably from the increase in productivity growth that began in the mid-1990s and the enhanced competition engendered by globalization. Innovation, spurred by competition, has nurtured the continual scrapping of old technologies to make way for the new. Standards of living have risen because depreciation and other cash flows generated by industries employing older, increasingly obsolescent technologies have been reinvested to finance newly produced capital assets that embody cutting-edge technologies."

He continued that "there is also no doubt that this transition to the new high-tech economy, of which expanding global trade is a part, is proving difficult for a segment of our workforce that interfaces day by day with our rapidly changing capital stock. This difficulty is most evident in the increased fear of job-skill obsolescence that has induced significant numbers of our population to resist the competitive pressures inherent in globalization from workers in the major newly emerging market economies. It is important that these understandable fears be addressed through education and training and not by restraining the competitive forces that are so essential to overall rising standards of living of the great majority of our population. A fear of the changes necessary for economic progress is all too evident in the current stymieing of international trade negotiations."

"The developing protectionism regarding trade and our reluctance to place fiscal policy on a more sustainable path are threatening what may well be our most valued policy asset: the increased flexibility of our economy, which has fostered our extraordinary resilience to shocks", said Greenspan. "The more flexible an economy, the greater its ability to self-correct in response to inevitable, often unanticipated, disturbances. That process of correction limits the size and the consequences of cyclical imbalances."

He cited as examples of the resilience, the weathering of of October 1987 stock market decline, the credit crunch of the early 1990s, the bursting of the stock market bubble in 2000, the events of September 11, 2001, and the recent rises in oil and natural gas prices.

FRB Governor Donald Kohn gave a speech at the same conference the following day, August 27. He stated that "I believe that the Greenspan doctrine, if I may call it that, has reflected the Chairman's analysis and deeply held belief that private interest and technological change, interacting in a stable macroeconomic environment, will advance the general economic welfare. Chairman Greenspan has welcomed the ability of new technologies in financial markets to reduce transactions costs, to allow the creation of new instruments that enable risk and return to be divided and priced to better meet the needs of borrowers and lenders ..."

"The Greenspan doctrine holds that these developments ...  have also made the financial system more resilient and flexible -- better able to absorb shocks without increasing the effects of such shocks on the real economy."

Donald KohnKohn (at left) added that "New technologies and changing market structures imply that regulation should be constantly under review; at times rolling back regulation -- for example, by lifting the Glass-Steagall restrictions on banking organizations -- will benefit competition and help the financial sector deliver services more efficiently and effectively. Moreover, regulation itself can benefit from competition. Running regulated and unregulated markets side by side gives people a choice of whether they want protection and helps to constrain regulation. Some of the same purposes can be served by having multiple regulators for the same function; in some circumstances, the possible adverse consequences of competition in laxity may be smaller than the potential for regulatory conformity and regulator risk-aversion to impinge on innovation and change."

GAO Reports on Government Data Mining Projects and Privacy

8/29. The General Accounting Office (GAO) released a report [82 pages in PDF] titled "Data Mining: Agencies Have Taken Key Steps to Protect Privacy in Selected Efforts, but Significant Compliance Issues Remain".

The report concludes that some federal agencies that operate data mining projects either do not comply with federal laws or federal guidance regarding individual privacy protection, information security, and accuracy of data, or claim exemption from them. However, The GAO examined only five federal government data mining projects for this report. This is only a small fraction of all federal data mining projects.

On. May 27, 2004, the GAO released a report [71 pages in PDF] titled "Data Mining: Federal Efforts Cover a Wide Range of Uses". The 2004 report found that "52 agencies are using or are planning to use data mining. These departments and agencies reported 199 data mining efforts, of which 68 were planned and 131 were operational." It also found that "122 used personal information". See also, story titled "GAO Reports on Data Mining at Federal Agencies" in TLJ Daily E-Mail Alert No. 907, May 28, 2004. The just released report builds upon the 2004 report.

The report concludes that "While the agencies responsible for these five efforts took many of the key steps required by federal law and executive branch guidance for the protection of personal information, none followed all key procedures. Specifically, most agencies notified the general public that they were collecting and using personal information and provided opportunities for individuals to review personal information, when required by the Privacy Act. However, agencies are also required to provide notice to individual respondents explaining why information is being collected: two agencies provided this notice, one did not provide it, and two claimed an allowable exemption from this requirement because the systems were used for law enforcement." These two are the FBI and IRS.

The report also concludes that "Agencies' compliance with key security requirements that are intended to protect the confidentiality and integrity of personal information was inconsistent."

It elaborates that "While the agencies responsible for the data mining efforts we reviewed followed a number of key security procedures, none had fully implemented all the procedures we evaluated."

The report also examined agency efforts to ensure that the information used in their data mining projects is accurate, relevant, timely, and complete. The report states that, on this issue also, the "FBI and IRS claimed an allowable exemption because their records are used for criminal law enforcement."

It also finds that "three of the five agencies had prepared a privacy impact assessment -- an important tool for analyzing the privacy implications of a system or data collection -- of their data mining efforts, but none of the assessments fully complied with Office of Management and Budget (OMB) guidance."

The report also explains the nature of data mining, and the threats that it may pose to privacy. It states that "mining government and private databases containing personal information creates a range of privacy concerns. Through data mining, agencies can quickly and efficiently obtain information on individuals or groups by exploiting large databases containing personal information aggregated from public and private records. Information can be developed about a specific individual or a group of individuals whose behavior or characteristics fit a specific pattern. The ease with which organizations can use automated systems to gather and analyze large amounts of previously isolated information raises concerns about the impact on personal privacy. Before data aggregation and data mining came into use, personal information contained in paper records stored at widely dispersed locations, such as courthouses or other government offices, was relatively difficult to gather and analyze."

The five data mining projects examined for this report are as follows:

  • a project of the Federal Bureau of Investigation's (FBI) Foreign Terrorist Tracking Task Force that is intended to help federal law enforcement and intelligence agencies locate foreign terrorists and their supporters in the US.
  • a project of the Internal Revenue Service (IRS).
  • the Department of State's (DOS) Citibank Custom Reporting System used to analyze government charge card spending patterns by its employees.
  • a project of the Department of Agriculture's Risk Management Agency's (RMA) used in connection with fraud, waste, and abuse in the Federal Crop Insurance Program.
  • the Small Business Administration's (SBA) Lender/Loan Monitoring System, provided under contract by Dun & Bradstreet, which is intended to identify, measure, and manage risk in two SBA loan programs.

The report was prepared for Sen. Daniel Akaka (D-HI), the ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee's Subcommittee on Subcommittee on Oversight of Government Management.

More News

8/29. The U.S. Court of Appeals (7thCir) issued its divided opinion [42 pages in PDF] in USA v. Stephens, an appeal from a criminal conviction for wire fraud. The appeal issues (jury selection process and sufficiency of the evidence) are not technology related. What may be significant is that the defendant, Wayne Stephens, was a manager at Accenture. Accenture states in its web site that its is a "global management consulting, technology services and outsourcing company". On June 1, 2004, the Department of Homeland Security (DHS) announced that it selected Accenture to be the prime contractor for the US-VISIT program, a contract that could valued as high as $10 Billion. See, DHS release. The US-VISIT is a program that maintains and integrates computer databases containing visitor information, including entry, exit, and biometric data. It is intended to enable the DHS to permit entry to legitimate visitors, but to keep out terrorists and certain others. The gist of the criminal charges against Stephens is that he used a computer program at Accenture to fraudulently obtain cash advances from Accenture. His fraud proceeded undetected because he kept his requests under $10,000. He was only caught when he requested a cash advance of $22,980, which then triggered an audit. This case is USA v. Wayne Stephens, U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 03-2964, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 02 CR 661.

Washington Tech Calendar
New items are highlighted in red.
Tuesday, August 30

The House will not meet on Monday, August 1 through Monday, September 5. See, House calendar and Republican Whip Notice.

The Senate will not meet on Monday, August 1 through Monday, September 5. See, Senate calendar.

The Supreme Court is between terms. The opening conference of its October 2005 Term will be held on September 26, 2005.

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for the ITU-D's meetings of Study Group 1 and Study Group 2, which will take place in September, Geneva, on September 6-9 and 12-15, 2005. See, notice in the Federal Register, July 8, 2005, Vol. 70, No. 130, at Pages 39544 - 39545. Location: Room 2533A, State Department.

1:30 - 3:00 PM. The Federal Communications Commission's (FCC) Informal Working Group 2: Satellite Services and HAPS will meet. See, FCC notice [PDF]. Location: Leventhal Senter & Lerman, 7th Floor Conference Room, 2000 K Street, NW.

EXTENDED TO SEPTEMBER 28. Effective date of the Federal Communications Commission's (FCC) VOIP customer lockout order. See, the order contained in the FCC's document titled "Public Notice' [PDF], numbered DA 05-2085, and released on July 26, 2005. It requires, among other things, that every interconnected voice over internet protocol (VOIP) service provider must send every one of its subscribers an FCC mandated statement regarding E911, and that every interconnected VOIP service provider must send to every one of its customers the FCC mandated VOIP warning stickers. This order further requires that every interconnected VOIP service provider obtain acknowledgement from every one of its subscribers, and that it "disconnect, no later than August 30, 2005, all subscribers from whom it has not received such acknowledgements". See, extension order [4 pages in PDF].

Wednesday, August 31

10:30 AM. The Heritage Foundation will host a panel discussion titled "U.S. China Ties". The speakers will be Randy Schriver (Armitage International), Perry Link (Princeton University), John Tkacik (Heritage), and Harvey Feldman (Heritage). PR Chinese President Hu Jintao will begin a visit to the U.S. on September 6. See, notice. Location: Heritage, 214 Massachusetts Ave., NE.

Deadline for the public to submit written comments to the House Ways and Means Committee regarding HR 3376, the "Tax Technical Corrections Act of 2005". See, notice.

Thursday, September 1

Compliance date of the Federal Communications Commission (FCC) final rule that extends and modifies the FCC Form 477 local competition and broadband data gathering program. See, notice in the Federal Register, December 29, 2004, Vol. 69, No. 249, at Pages 77912 - 77938. The FCC's report and order is FCC 04-266 in WC Docket No. 04-141.

The mandatory electronic filing via the Cable Operations and Licensing System (COALS) for FCC Forms 321, Aeronautical Frequency Notification, will commence. See, FCC Public Notice DA 05-270, and notice in the Federal Register, February 23, 2005, Vol. 70, No. 35, at Page 8811.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its public notice [37 pages in PDF] regarding its plan to review rules adopted by the FCC in 1993, 1994 and 1995, pursuant to the Regulatory Flexibility Act of 1980, which is codified at 5 U.S.C. 610. This public notice lists the rules to be reviewed. This public notice, which is dated May 31, 2005, is numbered DA-05-1524. See also, notice in the Federal Register, June 8, 2005, Vol. 70, No. 109, at Pages 33416 - 33426.

Deadline to submit to the U.S. Trade Representative (USTR) requests to testify at the USTR's September 14, 2005 public hearing on the People's Republic of China's compliance with its World Trade Organization (WTO) commitments. See, notice in the Federal Register, August 3, 2005, Vol. 70, No. 148, at Pages 44714 - 44715.

EXTENDED FROM AUGUST 22. Extended deadline to submit initial comments to the Copyright Office regarding its first report to the Congress required by the Satellite Home Viewer Extension and Reauthorization Act of 2004. See, original notice in the Federal Register, July 7, 2005, Vol. 70, No. 129, at Pages 39343 - 39345. See also, notice extending deadlines in the Federal Register, August 15, 2005, Vol. 70, No. 156, at Page 47857.

Friday, September 2

Deadline for the public to submit written comments to the House Ways and Means Committee's Subcommittee on Trade regarding technical corrections to U.S. trade laws and miscellaneous duty suspension bills. See, notice.

Sunday, September 4

The National Gallery of Art (NGA) will begin an exhibition technological advances in the storage and transfer of information in 15th Century. It is titled "The Origins of European Printmaking: 15th Century Woodcuts and Their Public". See, NGA notice and notice in the Federal Register, July 20, 2005, Vol. 70, No. 138, at Page 41808. This exhibition will run from September 4 through November 27, 2005. Location: NGA, between the Mall and Constitution Ave., NW, and between 3rd and 7th Streets.

Monday, September 5

Labor Day.

The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays.

Tuesday, September 6

The House will return from its August recess. See, House calendar.

The Senate will return from its August recess. See, Senate calendar.

TIME? The New America Foundation will host a conference titled "Terrorism, Security and America's Purpose: Towards a More Comprehensive Strategy". See, notice. Location: Capital Hilton Hotel, 1001 16th Street, NW.

1:30 PM. The Senate Judiciary Committee will begin its hearings on the nomination of Judge John Roberts to be a Justice of the Supreme Court. Location: Room 216, Hart Building.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding off-axis equivalent isotropically radiated power (EIRP) method for reviewing earth station applications in the fixed satellite service (FSS). See, notice in the Federal Register, June 8, 2005, Vol. 70, No. 109, at Pages 33426 - 33429. This NPRM is FCC 05-62 in IB Docket No. 00-248.

Deadline to submit written comments to the U.S. Trade Representative (USTR) to assist it in preparing its annual report to the Congress regarding the People's Republic of China's compliance with its World Trade Organization (WTO) commitments. See, notice in the Federal Register, August 3, 2005, Vol. 70, No. 148, at Pages 44714 - 44715.

Deadline to submit comments to the General Services Administration (GSA) regarding its proposal to establish a common infrastructure for electronically authenticating the identity of users of federal e-government services governmentwide. The GSA has named this the "E-Authentication Federation" and the "Service Component". See, notice in the Federal Register, August 5, 2005, Vol. 70, No. 150, at Pages 45391 - 45394.

About Tech Law Journal

Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for subscribers with multiple recipients. Free one month trial subscriptions are available. Also, free subscriptions are available for journalists, federal elected officials, and employees of the Congress, courts, and executive branch. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882.
P.O. Box 4851, Washington DC, 20008.

Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2005 David Carney, dba Tech Law Journal. All rights reserved.