Peter Dorman — Postmodern Monetary Theory: The NSA and Unconventional Monetary Policy

On August 12, damaged by the revelations emanating from the leaked NSA documents by Edward Snowden, President Obama empaneled a commission to make recommendations for reforms of US cyber-surveillance. On December 12 this group submitted its report, “Liberty and Security in a Changing World”.

One item that has attracted a bit of attention is a proposal, lodged in Recommendation 31, that reads as follows:

We recommend that the United States should support international norms or international agreements for specific measures that will increase confidence in the security of online communications. Among those measures to be considered are:

(1) Governments should not use surveillance to steal industry secrets to advantage their domestic industry;

(2) Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial systems.....

This last item is interesting. No documents have yet been released that suggest that the NSA or its foreign affiliates have altered financial accounts through electronic manipulation, but the commission presumably had access to a wide range of materials without knowledge of which will be made public in the future. It may be the case, then, that they are acting to preempt a future revelation. Even if there has actually been no such financial intervention, however, it is clear that there could be and that it would be prudent to consider the implications of such actions.

EconoSpeak
Postmodern Monetary Theory: The NSA and Unconventional Monetary Policy
Peter Dorman | Professor of Economics, Evergreen State College