The Government's Push For A Cashless Society Won't Go Away

As it previously did back in August 2016, the Wall Street Journal gives over the front page of a special section today to anti-cash crusader Kenneth Rogoff.  At least this time they also print a counter-point article, by a Wharton professor named James McAndrews.  Both artilcles are at this link (probably behind pay wall).

Rogoff's August 2016 effort was the subject of my post at the time, "There's Nothing More Frightening Than Rule By The 'Smart.'"   Rogoff -- MIT Economics Ph.D. 1980, former Chief Economist of the IMF, big time professor at Harvard -- is a perfect example of those people who think they are so smart that they should be allowed to re-design the world, while at the same time they are completely incapable of perceiving the downsides and unintended consequences of what they are proposing.  Among my comments from last year:

Naturally the visions of these geniuses are all variations of the same thing, namely some kind of government program to more closely monitor and/or control the people.  The geniuses know that there is no downside in such programs, first because the programs have been designed by themselves, and second because government programs are administered by all-knowing and perfect government functionaries, who are people like us and can always be trusted to do the right thing.

Getting rid of cash is another instance of government doubling down on failure.  It's like increasing penalties for drug crimes (this time we will stamp them out!) or adding yet one more in-kind distribution to fight poverty.  In the case of getting rid of cash, the previous effort was the law of "money laundering," which has undoubtedly been the single most abject and total failure of all government efforts to micro-manage the people.  (See "The Joke Of Criminalizing Money Laundering.")  Somehow, drug dealing, illegal gambling, and an entire $2 trillion per year underground economy continue to exist.  This will fix it!

Of course Rogoff leads off with the argument that getting rid of cash will reduce crime and tax evasion.  Well, that's open to debate -- and I would bet for the other side.  Then there's this next one, which he seems to think is an argument in favor of eliminating cash:

Another advantage of eliminating large bills would be the effect on monetary policy. The Federal Reserve should be able to implement negative nominal interest rates vastly more effectively in the absence of large bills, which could prove quite important as a stimulative tool in the next financial crisis.

That's right -- Rogoff, along with most other sophisticated monetary economists these days, has convinced himself that it's a good idea for a central bank to respond to a financial crisis by making it impossible for retirees to earn any return on savings unless they are willing to invest in equities.  Is there any actual evidence for this?  None that I know of.

Our counter-pointer Professor McAndrews makes some good points, but also seems to miss many important ones.  His main points are (1) 7.5% of U.S. households don't have bank accounts.  What about them?  (2) There is substantial legitimate non-criminal need for cash; and (3)
The bad guys will figure out ways around this, probably involving drawing legal businesses into criminal activity of helping them launder the revenue.  All good points that I don't mean to minimize.  Here are a few more that McAndrews doesn't mention, from least to most important:

• The power is out in Puerto Rico, and is likely to be out for a couple of months or more.  How are those credit cards working out for you?
• In a cashless world, everything you do is subject to monitoring by the government.  Indeed, under the Bank Secrecy Act and its incremental encrustations, the government can monitor all of your bank transactions, and all of your uses of credit cards, behind your back, and instruct your bank not to tell you that you are being monitored.  Is there any chance that a government might misuse such snooping powers against its political adversaries?  If you don't think so, then you have not been paying attention to what's going on.  E.g., from CNN, September 18, "US investigators wiretapped former Trump campaign chairman Paul Manafort under secret court orders before and after the election…. The government snooping continued into early this year, including a period when Manafort was known to talk to President Donald Trump.”  Or see the Susan Rice "unmasking" scandal.  
• Cash provides a safety valve against ramping up taxation to a higher and higher percentage of GDP.  The more they can stamp out the escape to cash, the more leeway the government has to increase the current 35% of GDP or so annual tax take to more like 50% or 60% or even 70%.  It's to make a more perfect world!  Without a doubt, this is the main objective of the Rogoffs of the world, although they will never state it explicitly.  

The good news is that, despite a number of setbacks, Bitcoin seems to be gradually progressing toward greater acceptability.  It can't happen fast enough.  Meanwhile, you owe it to yourself and your country to use cash as much as possible.  It's part of the never-ending fight for freedom.   

Reasons For Optimism About Climate Hysteria

Large numbers of my friends and acquaintances are climate skeptics, and many of them spend a good deal of their time feeling down in the dumps about the subject.  Their reasoning goes something like this:  Here we have something that should immediately be identified as baloney by any thinking person.  And yet thousands and millions of people seem to have fallen for it.  And not just random people, but people seemingly among the elites of society -- academics and journalists and government bureaucrats.  Most of the media function as propaganda bullhorns to spread the idiocy.  The forces of hysteria have commandeered tens of billions of annual dollars of government funding to pay for their program and spread their message, drowning out and suppressing any opposition.  Their program calls for taking away everyone's freedom and impoverishing the populace with higher costs for energy.  And yet the program seems to be getting adopted everywhere!  

How could a sane person not get depressed about this?  Easy!  Over on the other side of this issue, we have a secret weapon.  The secret weapon is that the supposedly carbon-free energy sources -- or, at least, those supposedly carbon-free energy sources that are acceptable to environmentalists (meaning wind and solar and definitely not nuclear and hydro) -- don't work.  Even worse, wind and solar are not even carbon-free, because it takes large amounts of carbon-based energy to make the turbines or panels or whatever.  Put these two problems together, and governments that try to reduce their carbon emissions by heavily subsidizing wind and solar quickly hit a wall where energy prices for the masses soar through the roof even as the carbon emissions don't go down.  You won't find the New York Times or Washington Post reporting on this, but it's getting harder and harder not to notice.

Let's take a closer look at Germany, which has been the source of quite a bit of news on this subject in the past few days.  On first take Germany would seem more than any place else to be the biggest cause of your depression.  "Transitioning" from fossil fuel energy to wind and solar has been the signature issue for Chancellor Angela Merkel for more than a decade, and as of this moment she seems to be cruising to victory in the election coming up on Sunday.  But don't get the idea that it would make any difference if one of the other candidates or parties managed to defeat Merkel, because there is no political party in Germany of any size or consequence that offers dissent on the "climate change" issue.  The entire country has fallen into the mass hysteria!  (Has anything like that ever happened before in Germany?  Don't ask!)  Germany has moved aggressively to cut its carbon emissions, and was a leader in the 2015 Paris negotiations in making aggressive promises of emissions reductions and in strong-arming other countries, including the United States, to commit to aggressive reduction targets.  Germany is part of the EU commitment to 40% emissions reductions (from 1990 levels) by 2030, and in addition has its own internal goals of reaching the 40% reduction by 2020 (coming right up!) and 95% reduction by 2050.  Impressive!

OK, that's the fantasy.  How about in the real world?  From Jamie Horgan in The American Interest, September 20, "Germany Will Miss Another Green Goal":

Berlin’s grand green energy transition is falling short of the lofty targets that inspired it. Earlier this month, the think tank Agora Energiewende released a report that projected Germany would fall well short of its goal to cut greenhouse gas (GHG) emissions—far shorter than was previously believed. Berlin had committed to cutting 40 percent of its GHG emissions by 2020 as compared to 1990 levels, but as that year looms large, the country has achieved a reduction of “just” 28 percent (a remarkable decrease, though nowhere close to the target), and it’s expected to only shave off another 2 or 3 percent over the next few years. Now, a new study from the BEE renewable energy group suggests that the country is going to fall short of its Brussels-set target of sourcing 18 percent of its energy production from renewables by 2020.

Good job to Horgan for publicizing this, but he's still getting taken in when he says that Germany's existing emissions reduction of 28% below 1990 levels is "a remarkable decrease."  No, it isn't.  That 1990 date was intentionally picked by Germany to scam the rest of the world.  1989 is the year the Berlin Wall fell.  Over the next decade and a half, the Germans shuttered essentially all of the inefficient Soviet-era heavy industry in East Germany.  Germany picked the 1990 start date so that it could take credit for those reductions that would have happened anyway and pretend that this had something to do with saving the planet.

Here is a chart of Germany's year-by-year greenhouse gas emissions changes since 1990.  Source: CleanEnergyWire.   

You will quickly see that Germany hit the emissions reduction wall around 2010.  Since then, its emissions have actually increased in 4 of the 7 years.  Multiply out the changes since 2009, and you will find that Germany's emissions at the end of 2016 were 99.79% of the level they had had at the end of 2009.  This, despite the fact that 2010 was the year they passed the so-called "Energiewende" law.  That's some "energy transition" -- 0.21% emissions reduction in seven years!

How could things be going so badly?  Among other things, Germany caved to environmentalists in deciding to eliminate nuclear power after the 2011 tsunami at Fukushima in Japan.  Nuclear power emits no CO2.  Wind and solar don't work, at least much of the time.  So, what's left?  Coal!  From Bloomberg News, September 21, "How Merkel’s Green Energy Policy Has Fueled Demand for Coal":

By 2030, the eastern German town of Poedelwitz will likely be razed to get at the rich veins of coal beneath its half-timbered houses. The reason: Chancellor Angela Merkel’s effort to steer Germany toward greener energy, which has unexpectedly meant booming demand for dirty coal. . . .  “This is unparalleled destruction of the environment,” says Jens Hausner, a farmer who has seen 17 of his 20 hectares consumed by digging equipment that looks like something out of a Mad Max movie. In a bit more than a decade, the hulking machines are expected to claw through the town’s 13th-century church and 40 or so remaining homes. 

 I like the part about "unexpectedly."  Can anybody in Germany do basic arithmetic?  Apparently not.  And what about the cost?

Germany has spent some 650 billion euros ($780 billion) on subsidies for green power in recent decades. But the country will at best get to 30 percent by 2020, according to Berlin climate researcher Agora Energiewende. Emission reductions “won’t be a near miss but a booming failure,” Agora researchers write. 

Even in a country with a GDP of almost $3.5 trillion per year, that $780 billion of "green" energy subsidies is real money.

Germany's stated goals of emissions reductions are just fantasies.  They will not be achieved, but meanwhile the prices that their people pay for electricity and gasoline and heating oil will soar.  (Germany's residential electricity prices are already about triple the U.S. average.)  Same for California, and New York, and anybody else who tries a comparable strategy.  As of now, you aren't reading much about the magnitude of the disaster, but it is truly a disaster.  The story can't be suppressed forever.  Be optimistic!

Two Proposals For Dealing With Equifax (And Experian And TransUnion)

Even as the big Equifax data breach was exploding into the news a couple of weeks ago, there was a bill that had gotten to a fairly advanced stage of the Congressional sausage-grinder, providing for a limitation of liability for the big credit bureaus in the event of such instances or other violations of the Fair Credit Reporting Act.  The principal sponsor was a guy named Barry Loudermilk of the Georgia-11 (northern Atlanta) District.  (Isn't that odd?  He's one of Equifax's home town Congresspersons!)  NBC News reports on the bill on September 11, with a headline spinning this as "Republicans" seeking to protect their big business allies.  ("Republicans in Congress Want to Roll Back Regulations on Credit Bureaus").  Loudermilk is quoted as follows:

“I have seen how a small technical error, turned into a lawsuit, can affect everyone in a business, including employees, customers, and vendors. Unfortunately, suits under the Fair Credit Reporting Act have skyrocketed in recent years while leaving consumers inappropriately compensated."

Well, I wouldn't think that Loudermilk's bill is going anyplace during the current firestorm.  

Normally, you might expect the Manhattan Contrarian to have some sympathy with legislative efforts to rein in abusive lawsuits, but this one is a little different.  As discussed in my first post on this subject last week, Equifax and its confrères in arrogant credit-bureaudom claim the right to collect all your most private and sensitive information and then to have no relationship with you and no responsiveness to you at all.  And to sell your information to thousands of their customers without giving you any idea who those customers are, what information is being sold, or what those customers are doing with the information.  And if you ask any of those questions, the credit bureaus will refuse to answer.  

Loudermilk does have a point that the current structure of the FCRA is essentially useless in protecting consumers against credit bureau abuse (few can show actual damages, and $1000 statutory damages is not enough to justify any individual lawsuit), while at the same time creating perverse incentives for entrepreneurial lawyers to gin up huge class actions over minor technical violations systematically repeated over thousands or millions of customers.  OK.  But there must be a way to make the credit bureaus responsive to consumers in the same way as every other normal company.  Not that other companies are perfect, but the credit bureaus are ridiculous.  (Try googling any of the three of them and the word "reviews", and get ready for hundreds upon hundreds of scathing one star reviews.  And these are the people who purport to establish your reputation!)

There have been numerous proposals for reform, including many put forth as the issue has been in the news during the past couple of weeks.  I'll discuss two:  one from Bloomberg View on September 15 by an opinion columnist named Joe Nocera, headline "Equifax Should Be a Public Utility";  and the other from a guy named Jim Harper for the Cato Institute made back in 2011, title "Reputation under Regulation: The Fair Credit Reporting Act at 40 and Lessons for the Internet Privacy Debate."

Nocera seems to start out on the right foot:

[T]hey don’t care because they don’t have to. At a minimum, the government needs to create incentives that would reward the companies for accuracy, customer service, and ironclad data security.

But from there it's all down hill.  How to create those incentives, Joe?  His big and only idea is to go from the current model of uber-government regulation to another model of much greater, super-duper government regulation -- the "public utility" model:

[T]here is a solution that is both radical and sensible: treat the companies like public utilities. [Adam] Levitin recently wrote a blog post proposing such a plan. The credit bureaus, he wrote, have no natural right to the data the collect; they only have it because the law tolerates it. Thus, he says, “It’s quite reasonable to qualify that right with a regulatory system.”  As public utilities, they would still be publicly-traded companies, but they would be overseen by a government body. . . .

It's the completely standard answer of doubling down on failed bureaucratic solutions.  If dozens of pages of statute and hundreds of pages of regulations have only brought us complete failure, what makes us think that doubling or tripling the regulatory regime will make things any better?

Harper's much longer report contains a very useful history of how we got where we are in the credit reporting mess.  You won't be surprised to learn -- or maybe you will be surprised -- that once the government got into heavily regulating the credit bureaus back around 1970, there followed a series of statutory amendments, one after the other, each giving the government itself more and more access to the credit bureau databases without consumer knowledge or permission for one after another seemingly laudatory purpose.  The end result of it all has been to turn the bureaus, in substantial part, into an arm of what Harper calls the "surveillance state," all taking place without your permission and behind your back, and without need of a search warrant or subpoena:

[I]n 1989 Congress expanded the “permissible purposes” for which a credit bureau could furnish a report by allowing federal grand juries to take a look at people’s credit files. . . .   Among the 23 amendments passed since 1990, Congress has added child support obligations to credit reports, later making disclosure of credit reports to state and local child support agencies a “permissible purpose.”  In 1996 Congress allowed disclosure of credit report information to the Federal Bureau of Investigation for counterintelligence purposes.  After a heavy revamp of the law’s provisions in 1996, Congress in 1997 allowed the use of credit reports for investigations of people related to security clearances . . . .  Terrorism opened credit bureaus’ files to the government yet further. In the USA-PATRIOT Act, Congress allowed the release to government officials of consumer reports “and all other information in a consumer’s file” for counterterrorism purposes. . . .  In 2006 Congress made it a “permissible purpose” to provide a consumer report to the Federal Deposit Insurance Corporation or the National Credit Union Administration as part of their preparation for appointment as conservator, receiver, or liquidating agent for depository institutions or credit unions. And in 2007 Congress made it a permissible purpose to provide a consumer report to a government agency in connection with the issuance of government-sponsored, individually billed travel charge cards. . . .   

You get the picture.  The fact is that far and away the entity most to be feared for potential misuse of your private information is the government itself, and giving it more regulatory authority only makes that problem worse, not better.

Harper's proposed solution?  He doesn't give a lot of details, but the gist consists of three points: (1) repeal the FCRA in its entirety, (2) declare in a one-line statute that consumer data reported to a credit bureau is held in "a confidential trust for the benefit of the consumer," and (3) let the common law take it from there.

Under this regime, if the credit bureaus want to use your information, they would either need to get your permission, or alternatively pay you (in some form) to allow them to use it.  In the case of credit reporting, you would very likely give your permission, because you would need to have credit bureau reporting in order to obtain credit.  For other uses, the experience with companies like Google and Facebook shows that most people will gladly give up plenty of personal information in return for nominal and often non-monetary consideration like free use of a website.  Others (like yours truly) aren't so glad to do this, so they'd have to pay me more, or maybe they couldn't use my information for other purposes.  Too bad for them.  What about this doesn't work?

The Inevitable Corruption Of "Affordable" Housing

Government handout and redistribution programs promise that they can achieve perfect justice and fairness in human affairs, but somehow we always seem to be coming up short.  The latest example arises once again in the arena of the "worst possible public policy," affordable housing in Manhattan.  

You always knew that the handing out of the affordable housing had to be corrupt.  But the secrets are well kept among the clique of insiders who do the handing to their friends and cronies.  In the last couple of weeks, elections in New York caused a small piece of the cover to be blown off.

September 12 was the date for primary elections for local offices in New York City -- Mayor, Comptroller, Public Advocate and City Council.  Those who know our city will recognize that the result of the Democratic Party primary generally determines the ultimate winner of most of these offices.  Since the City Council has term limits, many seats are open and attract multiple candidates.  That was the case in City Council District 2, which covers a swath of the Lower East Side of Manhattan -- an area that was formerly impoverished but is now rapidly gentrifying.

In District 2, the odds-on favorite candidate was one Carlina Rivera.  Rivera followed the time-tested road to a City Council seat, namely serving as a top staff person of the term-limited predecessor, who then made Rivera the designated successor.  Rivera's husband of several years is one Jamie Rogers, who has recently been serving as the Chairperson of the Community Board that covers the same area.  Rivera ended up winning her ballot line (and therefore almost certainly her seat) with 61% of the vote.  (However, note that turnout in this primary was only about 20%, and Democrats are far from all of the eligible voters.  Likely, Ms. Rivera got the votes of well less than 10% of eligible voters.)

Things started to get interesting about a week before the election when the New York Post on its famous Page 6 reported that Rogers and Rivera were living in a subsidized apartment under HUD's so-called "Section 8" voucher program -- a program whose benefits are supposedly reserved for "the poor."  From the Post:

Carlina Rivera — the leading candidate to replace her former boss, term-limited City Councilwoman Rosie Mendez — lives in federally subsidized Section 8 housing reserved for the poor.  Rivera is married to James Rogers, a Cornell Law School graduate who once worked at the white shoe firm of Sullivan & Cromwell.

Readers not familiar with the ins and outs of the New York big law firm community may not recognize Sullivan & Cromwell as not just any old law firm.  It is the principal outside law firm for Goldman Sachs and for a big chunk of corporate America.  A recent piece at Above the Law puts the starting associate salary there at $180,000, rising to more than $300,000 over several years.  

And over the next several days it only got more interesting.  Turns out that Rogers's dad is a recently-retired partner of Cravath, Swain & Moore -- again one of the very top firms in prestige and profitability.  Partners at such firms earn another order of magnitude above the associates.  The American Lawyer keeps its most recent law firm profitability figures behind a pay wall, but here is a list at Wikipedia from 2012.  Annual profits per partner at Cravath were $3.435 million.  Rogers Sr. was a partner there for about 30 years, which means that he likely has a net worth in the range of $25 - 50 million, and potentially even more.  Then there were the pictures of the younger Rogers competing in sailing regattas with his dad.  This picture from the Post has Jamie on the left out sailing, and Carlina on the right:

Yes, your tax dollars are subsidizing the rent of these people -- because they have declared themselves to be "poor."  According to this article, their current Section 8-subsidized rent is about $1600 per month, as against a market rent for the apartment of $2775.  You pay the difference.  

You might think that at this point Rogers and Rivera would have been overcome with shame and gone off and crawled in a hole somewhere.  Of course not!  Instead, they immediately doubled down.  They went out and did interviews with the local newspaper, The Villager, which appeared immediately after the election on September 14.    The headline summarizes their defiant attitude:  "We Qualify". 

In separate interviews with The Villager, Rivera and Rogers both said that it’s perfectly legal for them to live in the apartment and that their incomes were fully vetted under the requirements of the Section 8 program.

Read the full article and you find out how this works.  It basically goes back to the central deception of the poverty scam, which is the delusional presumption that a family's arbitrarily-defined "income" in any one given year inexorably reveals its permanent status in an immutably fixed social class structure.  In this case Rogers managed to engineer his "income" for one year down close to zero, and used that snapshot to qualify for a Section 8 handout for life.  Essentially, he had opened a mini-chain of coffee shops, a couple of which were not performing.  So he closed those two and took the write-off in a single year in order to offset the income from the others.  Then he and Carlina had their "income" for that year "vetted" by the friendly cronies in the housing bureaucracy.  Voila!  A housing subsidy for life for a couple that by any realistic measure is well into the top 0.1%!

(But wait, you ask -- Didn't the Manhattan Contrarian also artificially engineer his income for one year down to about zero?  Yes!  However, I did not have the gall to use that result to claim subsidized housing for life.)

Well, once Rivera claims her Council seat on January 1, Rogers and Rivera will have a much higher income that will make the Section 8 voucher far less valuable, and indeed they claim they will relinquish it.  But thanks to them for shedding a little light in on how the political insiders game the housing giveaway system.  And they are far from alone among the political class in corruptly claiming for themselves the benefits of housing giveaways intended for the disadvantaged.  Other examples:

• Council Speaker Melissa Mark-Viverito is a crazed hard leftist who comes out of a privileged upbringing (her dad was a hospital executive) in Puerto Rico.  She lives in a townhouse in East Harlem that was built with city subsidies in the 90s.  According to this Wikipedia article, she acquired the property with a "taxpayer subsidized loan."  The zillow.com website contains no valuation or transaction history for her property at 211 East 111th Street (I wonder why -- politician's privilege?), but does have information for the comparable property next door (209 East 111th Street).  The latter property was initially bought in 1999 for $349,500, and has a current estimated value of $2.72 million.
• Then there's my long-time State Senator (recently retired), Tom Duane.  While he was a State Senator he managed to get himself a spot in the Penn South complex in the West 20s.  This is something we call here in New York a "limited equity co-op."  I won't go into the details, but again, these things are deeply subsidized by the taxpayers.  At the time Duane was admitted to Penn South, two bedroom apartments went for completely artificial prices in the range of about $18,000.  Today the market value of such an apartment would be in the range of at least $1 million to $2 million or more. 

Hey, they're politicians.  Of course they know how to work the system to their own advantage!  I have no way of knowing how many of our other politicians have managed to do something similar.

So, do you still think that "affordable housing" initiatives are going to be getting us any closer to the world of perfect justice and fairness any time soon?

Trump Administration Takes First Baby Steps Pushing Back Against The Dependency State

Every time you start thinking that Trump leaves something to be desired as President, just keep in mind that the alternative was Hillary.

Consider one of the little-mentioned areas of distinction:  the dependency state.  The left in general, and Obama in particular, think that every dollar handed out by the government is a big positive in the world.  We're "helping struggling families," or something like that.  It seemingly never has occurred to them that increasing dependency on government handouts has any down side.  Without doubt Hillary as President would have brought more and yet more of same.

Consider the trajectory of food stamp recipients during Obama's tenure.  Here is a chart of recipients by year (source):

Obama's first term was supposedly a time of recovery from a deep recession, but in sharp contrast to previous recoveries, the number of food stamp recipients went up instead of down, and by dramatic amounts.  The number of recipients shot up from about 28 million in 2008 to some 47.6 million in 2013, and then despite continuing economic improvement declined only marginally thereafter, ending when Trump took office at about 44.2 million, some 16 million higher than the pre-Obama record level.  What was going on?  If you remember my post from back on April 25, 2013, it turned out that the government had hired an army of "food stamp recruiters" to get every possible person onto the handouts, and in addition (with Congressional support) had waived work requirements and asset restrictions on eligibility.  (My post was in part based on a series in the Washington Post by Eli Saslow, for which he won a Pulitzer Prize.)

And food stamps were far from the only example of the Obama administration actively seeking to increase and maximize dependency.  The other obvious big example was Obamacare, where the program launch brought a truly enormous federal marketing effort to attract more and yet more people onto subsidized "healthcare."  Back in 2013 the AP identified at least $684 million budgeted by governments at all levels, mostly federal, to advertise and promote enrollment in Obamacare.  Yet another area of dependency is social security disability, which went from 9.2 million beneficiaries just prior to Obama taking office in 2008 to 10.6 million in 2016.  Once on social security disability, almost nobody ever gets off.

It seems that the Trump administration is actually taking an intentionally different course on the issue of dependency.  First, Trump's budget outline that came out back in May proposed that the food stamp budget would be cut by some 29% over 10 years.  OK, but that was only a projection, and based more on assumptions of an improving economy than on specific changes in policy.  Then, in August, the Centers for Medicare and Medicaid Services announced that they would reduce the Obamacare advertising budget from about $100 million in the current year to only $10 million in the coming year.  This time it's a real one-year change in policy by the administration itself.  This is starting to sound like something.

And here's another item that you may have missed.  On August 1, according to the National Law Journal, Trump nominated a wounded Iraq vet named Daniel Gade to the EEOC.  One of EEOC's missions is assisting military veterans who have claims for discrimination or disability.  But Gade, according to the NLJ,  is actually a guy who has been a leader in criticizing disability pay for wounded vets:

Gade has been an outspoken critic of disability pay for wounded veterans, traveling the country in recent years making speeches and giving interviews about his views that the U.S. Department of Veterans Affairs should move away giving disability checks to wounded soldiers. He was twice wounded during service in Iraq, which led to the loss of his right leg. He spent six months in hospital and six months as an outpatient when he had 40 surgeries.

He has warned about misguided efforts to help veterans with government assistance. . . .  “People who stay home because they are getting paid enough to get by on disability are worse off,” Gade told The New York Times in 2015. “They are more likely to abuse drugs and alcohol. They are more likely to live alone. You’ve seen these guys. And the system is driving you to become one of them, if you are not careful.”

Well, that's about a 180 degree change from how the Obamanites approached this subject.  But an administration that actually works on this issue could probably reduce overall dependency by as much as 25% in one four-year term.  And the effect on the "poverty" rate could be dramatic, since nearly everyone who gets removed from dependency and gets work thereby exits from "poverty."             

How To Deal With Equifax

This is not a financial advice website.  However, with the big Equifax data breach, there are all kinds of bad advice out there on what to do.  In my case, I sent them a letter today.  By snail mail, return receipt requested.  I thought that some readers might find the letter useful, so I have copied the text into this post below.

The situation in the U.S. with the so-called "credit bureaus" (Equifax, Experian, TransUnion) is really quite bizarre.  They obtain information that you provide in strict confidence to your bank or credit card company, supposedly for purposes of credit reporting, which is a valuable function.  But the actual credit reporting function is mostly done by barter or something close to it (bank reports customer payment history and in turn gets access to full credit reports), so how to turn yourself into a multi-billion dollar infotech powerhouse?  (Equifax and Experian both have reported market caps in the range of $14 billion; TransUnion is a private company, but clearly it made recent ex-Commerce Secretary and Obama Campaign Finance Chair Penny Pritzker very wealthy.)  It's easy!  Take the personal data obtained from consumers in strict confidence and re-sell it to thousands of customers without the consumers' permission.  And since the credit bureaus have no direct relationship with the consumer, they don't have nearly the incentive of your bank or credit card company to safeguard the information they hold and then sell.  What are you going to do, fire them?  Thus, one big hack after another.  (Experian last had a big breach in 2015.  ChoicePoint -- a major customer of the credit bureaus -- had big breaches in 2004 and 2008.  And so forth.)  How our genius so-called "regulators" have allowed this situation to develop is a story that is too long for this post.  But here we are.    

You are welcome to use all of my letter for yourself, or as much as suits your circumstances.  Clearly, it is not likely that you froze your credit with Equifax as I did back in 2009.  But go ahead and demand the credit freeze for yourself today!  (And while you're at it, do the same with Experian and TransUnion.)    

Here are a few of the principles that inform this letter:

• Give them the absolute minimum amount of information that they will need to identify you as a unique individual.  (In my case my name is very close to unique, so this is not difficult.)  Every piece of information you give them about yourself is very valuable to them, because their main business is to package information about you and others and sell it without your permission.  Just like your contacts list in Outlook, their database is full of inaccuracies and anomalies.  Everything you give them, whether it be a current telephone number, a date of birth, an employer, or whatever, will be added to their database and sold and/or hacked to the world.
• Under no circumstances give them your social security number.  Their data base has literally millions of social security number "anomalies," and they would dearly love you to help them clean it up so they can sell your information for a higher price to their customers without your permission.  And if you should ever give it to them, and then try to object to their use of it for their own profit, their response will be, "he gave it to us without imposing restrictions and knowing that we re-sell it."  Meanwhile, if you try to have any dealings with them by website, you will not be allowed to proceed without inputting your social security number.  That's why you need to send a letter.  I can state that I have obtained both credit reports and credit freezes from all three credit bureaus without ever providing my SSN.  In some cases it took considerable persistence, but right now Equifax is not in a very good position to argue about this, so go for it.
• Their claimed basis for demanding social security number is to "identify" you.  I have never understood how exactly name plus SSN constitutes good "identification" when they sell that information to thousands of customers.  But that's why I offer to show up in person with my passport.  What's their answer to that?  (Fortunately, Equifax has an office in Manhattan.)
• Everybody should demand a license for use of their data for any purpose other than credit reporting with your explicit consent.  The license would include a provision for a fee, a limitation on permitted uses, and a liquidated damages provision in case of use for non-permitted purposes and/or a hack.  Of course they won't agree to this, but really, people should start being aware of what's going on and demanding decent treatment.
• They also won't agree to deleting the bulk of your "credit header."  That's not a reason not to demand it.

With that, here's the text of the letter:

Francis J. Menton

[Address]

www.manhattancontrarian.com

 U.S. mail return receipt requested

September 12, 2017

Equifax Credit Information Services, Inc.

P.O. Box 740241

Atlanta, GA 30374

Dear Sir or Madam:

I am writing you at this time because of the recent data breach experienced by your company.   I am corresponding by letter because your online resources for dealing with this matter all require that I input my social security number or some portion of it.  I have never provided you with my social security number and I will not do so now.  Obviously, you cannot be trusted with it.

Here are my requests/demands:

·      Kindly inform me if I have been a subject/victim of the data breach, and if so what pieces of my information have been disclosed and to whom.

·      I would like to sign up for the free year of credit monitoring that you are offering to all who are subject/victims of the breach.  This service must be made available to me in a manner that does not require me to provide any information about myself other than as contained in my letterhead above.  For any other information about me, you will have to pay a fee and sign a license agreement as to use of the information, which will contain a provision for liquidated damages.  Kindly advise if you would like to pursue this option, and I will provide a fee schedule and license agreement.

·      As you know, I have had a credit freeze in place with Equifax since January 2009.  Kindly advise if my PIN number for this credit freeze has been compromised by the recent data breach.  If you are anything less than 100% confident that the PIN number has not been breached, I will obviously need a new PIN number.  Therefore, either advise that you are absolutely 100% confident that the PIN number has not been breached, or provide me with a new PIN number.

·      Kindly delete from your databases all so-called “credit header” information about me other than the information in the letterhead of this letter.  This includes, but is not limited to, my social security number or taxpayer ID number (if you have such), any and all prior addresses, current or prior telephone numbers, my date of birth, and any employment information.

If you feel that you need to do more in order to verify my identity, I would be glad to meet in person with one of your representatives.  I could bring my passport and/or driver’s license, and/or New York State attorney identification card to such a meeting.  Although I will be glad to show these documents to your representative to verify my identity, I will not permit you to make copies of same, nor to make a record of any information or numbers on such documents, without payment of a license fee and signing of a license agreement with a liquidated damages provision, as indicated above.

The best way to communicate with me is by hard copy mail to the address above.  Alternatively, you may respond by email via my website address above.

Very truly yours,

Francis J. Menton