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.   

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?

All The Federal "Privacy" Regulations Are Worse Than Useless

By now you've probably heard of the big data breach at credit reporting agency Equifax.  It apparently occurred back in July, but the details are only now coming out.  Numbers in the range of 143 million have been mentioned for how many consumers have been subjected to compromise of their personal data, including their name, addresses, date of birth, and social security number (aka your "personal information").  The combination of these things in association with each other is what enables the opening of a credit account in your name.

When comparably large data breaches occurred a couple of years ago at Yahoo and Target, you knew you were at risk if you did business with those companies; and if you did, you could rightfully blame yourself.  But, you say, you've never had any dealings of any kind with Equifax.  Therefore, your information cannot possibly be at risk.  Wrong.  Pretty much every bank, credit card company, mortgage lender, car finance company, or credit provider of any type shares your personal information with Equifax.  Without your permission.  Indeed, even over your specific objection.

The New York Times today has no fewer than three big articles on the Equifax breach, one on page A1, and two more on the front page of the Business Section.  The article on page A1 is headlined (in the online version) "Equifax Hack Exposes Regulatory Gaps, Leaving Consumers Vulnerable."  The theme, you will not be surprised to learn, is that the problem was caused by insufficient government regulation:

Despite the wealth of sensitive information in its databases, Equifax, in essence, falls through the regulatory cracks.  The dangers of such lax oversight became apparent on Thursday when Equifax disclosed that hackers had compromised the personal and confidential information, including Social Security numbers, of nearly half of the American population.

"Falls through the regulatory cracks"?  "Lax oversight?"  Funny, but as far as I've been able to observe over the past multiple decades, the credit reporting business has been the subject of one big federal statutory and/or regulatory initiative after another.  First there was the Consumer Credit Protection Act of 1968, followed quickly by the Fair Credit Reporting Act of 1970, which has subsequently been amended several times.  The FCRA gave regulatory jurisdiction to the Federal Trade Commission, which has issued multiple rounds of regulations.  Then there was a big statutory addition made by the Gramm-Leach-Bliley Act in 1999, followed by additional rounds of regulations from the FTC.  The Dodd-Frank Act in 2010 added yet more statutory provisions, and brought in another regulator, the Consumer Financial Protection Bureau, with its own rounds of regulations.  Are you now telling us that all these layers and layers of statutes and regulations have given us nothing but a bunch of "cracks" for our information to slip through right into the hands of the bad guys?

The problem, of course, is that all the rounds of statutes and regulations have been completely incompetent.  The chance that the next round will be any less incompetent is approximately zero.  With so many regulations the details have become mind-numbingly complex, but the bottom line is that you have no ability whatsoever to limit access to your information only to the people and companies of your choice.  Nor can you find out any comprehensive list of who has access to your personal information or what they are doing with it.

The statute most specifically focused on the privacy of your personal information was Gramm-Leach-Bliley (GLBA).  Here is a summary of the GLBA privacy provisions from the Electronic Privacy Information Center.  GLBA is the source of the requirement for all those "privacy notices" that you get regularly from your banks and credit card companies and insurers.  Have you ever read one of them?  I'll bet the answer is no.  And you are right not to.  They all start out saying that "you have options," but then seem to exempt from the opt outs anything of any significance.  Somewhere in every one of them it will say either that we use your information to "manage our business" or "as permitted by law" or some other empty phrase that lets them do whatever they please without giving any specifics.  As an example (and not meaning to pick on them specifically) here is the relevant part of the Citibank privacy statement currently available at their website:

Citi uses the information we collect about and from you to provide services, to manage our business and to offer an enhanced, personalized online experience on our site and third-party websites.

The information we collect allows us to:

  • Recognize you when you return to our site so we can personalize your experience
  • Process applications and transactions
  • Respond to your requests
  • Recognize and provide you account related benefits and information on our sites.
  • Provide you more relevant product and service offers on our sites and in other advertising

We may also use personal information we have about you such as your email or postal address to deliver advertising to you directly or on third party websites.

Try reading that a few times and see if you can figure out where they tell you that they give your personal information to Equifax (and for that matter Experian and TransUnion).  Or where they tell you that Equifax, Experian and TransUnion in turn sell your personal information to data aggregators and brokers who then sell it to all kinds of other people and entities for all kinds of other unspecified purposes, like:

  • Governments at all levels for whatever they feel like doing with it, including snooping on you behind your back without a warrant.
  • Private investigators for whatever they do with it.
  • Law firms (my old law firm subscribed to one of these services).
  • Others?  I've demanded a complete list from my bank, from each of the three credit bureaus, from some of the data aggregators (like ChoicePoint) and others.  None will respond.

Here's another page from EPIC, this time about ChoicePoint.  Haven't heard of them?  Here's an example of what they sell:

ChoicePoint sells a wide array of information to the government, including:  Credit headers, a list of identifying information that appears at the top of a credit report. This information includes name, spouse's name, address, previous address, phone number, Social Security number, and employer.

Wait, where did they get that information to sell?  You guessed it.  If you think that a big piece of the holes in the GLBA are to enable the government to circumvent the pesky Fourth Amendment requirements for court-approved warrants if they want to investigate you, you are now starting to catch on.  Enabling you to protect yourself against fraud is not one of their priorities.

By the way, ChoicePoint had a big data breach in 2004, and then another one in 2008.  

So is there anything you can actually do to protect yourself against misuse of your personal information?  Yes:  put a "freeze" on your credit.  If you haven't done it yet, you should do it promptly, with each of the three credit bureaus.  But don't do it online.  Try to do it online, and they will of course demand your social security number in order to proceed.  Don't give it to them.  They will promptly re-sell it.  Write them a letter.  It's some work, but it can be done. 

There's Nothing More Frightening Than Rule By The "Smart"

Just a few short days ago I was pointing out that if you consider who some of the "smartest" people are (as measured by top credentials from top universities), you will quickly realize that allowing such people to have significant political power is "very frightening."  As a couple of examples, I used late 1970s top MIT Economics Ph.D.s Paul Krugman and Olivier Blanchard, who have used their credentials and their respective perches at Princeton/NYT and MIT/IMF to perpetrate on the world every kind of economic fallacy to justify expansion of government,  to undermine world economic performance, and to keep the people in check.

And now in this weekend's Wall Street Journal we find the prime real estate in the Review section given over to one Kenneth Rogoff for a lengthy piece advocating that the governments of the world phase out the use of cash.  The title of the article is "The Sinister Side of Cash."  It seems that Rogoff is just out with a new book ("The Curse of Cash"), and this big article gives him the chance to peddle it.

Who is this guy Rogoff?  You've already guessed correctly:  he is yet another contemporary of Krugman and Blanchard in the MIT Economics Ph.D. program of the late 70s.  (Rogoff actually took a year off -- to play chess! -- and got his Ph.D. in 1980.)  He's also a big-time professor of economics at Harvard.  And also one of Blanchard's predecessors as Chief Economist of the IMF.  Hard to be more of a genius than that, right?

And of course, what geniuses like Rogoff know more than anything is that their great genius gives them the ability to envision a far more perfect world than this imperfect thing we've been suffering with so far.  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.

So what is the reason given to phase out the use of cash?  It's that the government money laundering laws, introduced in 1970 and tightened multiple times since, just haven't succeeded like they were supposed to in wiping out all crime involving money.  Now we learn that it wasn't the "laundering" of the money that was allowing crime to flourish, but the very existence of money in the form of cash:

There is little debate among law-enforcement agencies that paper currency, especially large notes such as the U.S. $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism. . . .  Cash is also deeply implicated in tax evasion, which costs the federal government some $500 billion a year in revenue.

I have previously covered the subject of criminalizing money laundering in two posts, The Joke Of Criminalizing Money Laundering (June 2015) and The Joke Of Criminalizing Money Laundering -- Part II (April 2016).  The short version is that the money laundering laws -- principally the Bank Secrecy Act of 1970, and amendments to same in the USA PATRIOT Act of 2001 -- were supposed to stamp out crime involving large amounts of money through deputizing the banks to spy on their customers 24/7 behind their backs and thereby enabling the authorities to "follow the money" to track down the crooks.  Forty-six years in, at a cost of massive expense to financial institutions and equally massive loss of freedom and privacy to the people, the government hasn't made the slightest dent in the big-money crimes (the biggest of which are the illegal drug trade and illegal gambling).  Indeed, it seems that a brand new heroin epidemic is exploding right now beneath their very noses.  Meanwhile they regularly prosecute banks and other financial institutions for failing at the impossible task of figuring out which of their customers are crooks, and they periodically prosecute some poor slob who had the temerity to use cash in large amounts for an otherwise perfectly legal purpose without reporting it to them (famous example: Denny Hastert).  And they cynically use the cry of "terrorism" (see, e.g., Rogoff quote above) to justify continuing and expanding the money laundering laws, as if those laws could be of any use catching terrorists (whose activities involve relatively small amounts of money) when they are useless in catching big drug dealers (whose activities involve much larger amounts of money).

And of course the answer of the geniuses like Rogoff to total government failure is always the same: double down!  We can finally succeed in stamping out this financial crime thing if only we hand over to the government yet more massive new powers, here the ability to track and trace everything the people do 24/7, down to the the smallest transaction.  (OK, in the article Rogoff says he would be willing to allow the continued existence of bills of $10 and smaller.  Thanks, Ken!)  All behind their backs, of course.  

To anyone with the slightest understanding of human nature and incentives, the results of Rogoff's program are completely predictable.  The professional criminals involved in big-time financial crime will find a substitute for cash.  Maybe it's Bitcoin.  Maybe it's another crypto-currency.  Maybe it's some other currency than dollars.  Maybe it's gold.  Maybe it's existing dollar bills in circulation (which could gradually become more valuable as they become scarcer over time.)  Maybe it's all of the above.  The big-time crooks have the need and the time to find the substitute.  You do not.  So the government gains absolutely nothing against the big-time crooks, but gets the ability to track and trace everything the regular people do.

So is your thought, so what?  What do I have to worry about if the government gets my monthly credit and debit card statements?  I'm law abiding!  That's what you think.  There are said to be over 4000 federal crimes alone (nobody has an exact count!).  Criminal defense attorney Harvey Silverqlate has a book titled "Three Felonies a Day," the title reflecting the number of crimes you are likely committing on a regular basis without knowing it.  For a small sampling of crimes that you may be committing, see this article "8 Ways We Regularly Commit Felonies Without Realizing It."    

Government flunkies would never do something so evil as flyspecking the financial records of their political opponents to find something to prosecute, would they?  Really, you owe it to yourself to pay attention to this issue -- and to use cash everywhere you possibly can.

The Joke Of Criminalizing Money Laundering -- Part II

Who was it who first came up with the bright idea that if we just criminalize something called "money laundering," and make all the banks involuntary deputies of law enforcement, spying on their customers behind their backs 24/7, we can put a stop to all the nefarious criminality and perfect the world?  The game started with the disgusting Bank Secrecy Act back in 1970, and moved to a new level with the USA PATRIOT Act in 2001.  Today, banks in the U.S. file close to 2 million annual "Suspicious Activity Reports" on their customers.  Did they file one (or a hundred) on you?  You don't know, because they're not allowed to tell you. 

Did you notice that along the way the law enforcement authorities have achieved victory in the drug war?  Yeah, neither did I.  And drug dealing at least involves substantial amounts of real money.  Nobody can even give a coherent explanation of how a money laundering regime that can't make a dent in the multi-billion dollar drug business is supposed to stamp out terrorism, which generally does not involve any substantial amounts of real money.  In this post last June I called criminalization of "money laundering" a "joke" and "an exercise in total futility."  Of course, it may not seem like a joke to people like former House Speaker Denny Hastert, who found himself prosecuted for "money laundering" for engaging in the distasteful but otherwise perfectly legal activity of paying blackmail.  And then there are the banks, who have paid, in the aggregate, in excess of $20 billion in fines over the past decade for supposedly violating anti-money-laundering regulations.  For example, HSBC paid a fine in excess of $1.9 billion in 2012, said to arise mainly out of dealings in Mexico.  (You mean they have drug dealers down there?  Who knew?)

Bringing us up to date on the activities of our genius government, the Wall Street Journal yesterday helpfully carried a front-page article headlined "U.S. Terror-Finance Rules Drive Money Underground."   And guess what?  It seems that after paying the 20 or so billion, the banks have decided that it pays not to take chances, and they have moved to declining to do business with any potential customer who looks the least bit sketchy.  

U.S. banks have closed thousands of accounts held by people and organizations considered suspicious, high-risk or difficult to monitor—including money-transfer firms, foreign banks and nonprofits working abroad. Closing accounts for fear their customers may be up to no good evicts from the financial system the innocent as well as those the U.S. government would most like to watch, a consequence not anticipated by Washington.  Comptroller of the Currency Thomas Curry this month acknowledged the potential danger. “Transactions that would have taken place legally and transparently may be driven underground,” he told an international conference of bankers and regulators in Washington.  

Really, who could have guessed that such a thing might happen?

The Journal reporter then tracks the activities of one Abdi Warsame, a Somali native who works for a Midwestern money-transfer company.  Seems that the company has been shut out of the banking system.  No problem!  Warsame neatly stacks and wraps some tens of thousands in mid- to high-denomination dollar bills, packs them into his luggage, and flies off to Dubai.  Along the way, he files all the appropriate forms with the U.S. and Dubai authorities and goes through all the security and customs checks.  Upon his arrival in Dubai, the money disappears into the underground system.  Congratulations to our genius government functionaries!  Really, where did they think this was going?

But don't worry -- as reported here just a few days ago, the government geniuses already have the new plan at the ready, namely the abolition of cash.  Yeah, that'll work!  It's like they have never heard of Bitcoin.  Or then there's my favorite, gold.  At the current price of about $1250, $1 million in gold weighs about 50 pounds -- not so much more than $1 million in hundred dollar bills (which weighs about 20 pounds).  OK, it's a little awkward, but still not so much that you can't get it into your carry-on bag for the flight to Dubai. 

Just Think How Neat And Orderly Everything Will Be Once Government Functionaries Can Monitor Everything

Really, it's disgusting how people keep messing up, when left to their own devices and without minute-by-minute guidance and monitoring by perfect and all-knowing government functionaries.  But don't worry, the technology for government to monitor everybody and everything all the time marches forward at an ever-accelerating pace.  Can it be long before the curse of human imperfection has been eliminated?

For example, consider cash.  Can you believe that the government to this day still allows people to conduct economic transactions using this untraceable and unreportable medium?  And the next thing you know, people use it buy and sell illegal substances like drugs, to gamble, to pay employees "off the books," to avoid taxes, and God knows what!  Get rid of it, and immediately everything will be neat, orderly, and in accordance with government-prescribed perfection.  Or at least that is the universal view of the government functionary.  Serious proposals are circulating right now to get rid of high denomination bills (like the $100 in the U.S.) as a step toward perfecting society.  And after the $100, why not just get rid of cash entirely?  Megan McArdle covers this subject in a column at Bloomberg View (that also ran in the New York Post):

The Bank of Korea is planning for a cashless society by 2020. Swedes are making the shift. I am intrigued but also troubled.  There’s a lot to like about the idea of a cashless society, starting with its effect on crime. The payoff to mugging people or snatching their bags has already declined dramatically, simply because fewer and fewer people are carrying cash around. I myself almost never have any of the stuff on hand. . . .  A cashless society would also see a decline in the next level of robberies: stickups of retail outlets. . . .   One step beyond that, there’s the effect on criminal enterprises, for whom cash is key. Making it impossible to transact business while keeping large amounts of money away from the watchful eye of the government will make it much harder to run an illegal operation.

What could possibly go wrong?  Well, for starters, could the perfect all-knowing government ever make a "mistake"?  McArdle:

When I was just starting out as a journalist, the State of New York swooped down and seized all the money out of one of my bank accounts. It turned out -- much later, after a series of telephone calls -- that they had lost my tax return for the year that I had resided in both Illinois and New York, discovered income on my federal tax return that had not appeared on my New York State tax return, sent some letters to that effect to an old address I hadn’t lived at for some time, and neatly lifted all the money out of my bank. . . .  Unmonitored resources like cash create opportunities for criminals. But they also create a sort of cushion between ordinary people and a government with extraordinary powers. Removing that cushion leaves people who aren’t criminals vulnerable to intrusion into every remote corner of their lives.

I would say that that kind of "mistake" is the least of our worries about the government.  What if the government itself is a pervasive criminal enterprise?

Anyway, don't get the idea that monetary transactions are the only thing that the government is planning to monitor.  On Tuesday (the Ides of March) the New York Times reported on a new New York State program, taking effect March 27, under which all prescriptions for pharmaceuticals are now required to go through a state-monitored computer system.  No more paper allowed!

Starting on March 27, the way prescriptions are written in New York State will change. Gone will be doctors’ prescription pads and famously bad handwriting. In their place: pointing and clicking, as prescriptions are created electronically and zapped straight to pharmacies in all but the most exceptional circumstances.  New York is the first state to require that all prescriptions be created electronically and to back up that mandate with penalties, including fines and imprisonment, for physicians who fail to comply.

The stated reason for this is to try to crack down on abuse of prescription opioid painkillers, which have caused increasing numbers of deaths in recent years.  But if that's the reason, why don't they just monitor those prescriptions, and stay away from the millions of prescriptions for medications against things ranging from diabetes to high blood pressure to cholesterol? And the answer is, they take the opportunity to monitor everybody for everything because they can.  Who's going to stop them?  And anyway, the only people with access to the information are going to be the perfect, all-knowing, a-political, expert state functionaries.  So what's to worry about?  (For now, there appears to be an exception to New York's new law for prescriptions that are to be filled out of state.  I guess I'll take advantage of that one.)

In other news, this time from Denver, Colorado, it seems that after several complaints were received, an independent monitor conducted a review of use of the supposedly confidential National Crime Information Center and Colorado Crime Information Center databases by the Denver Police Department, and promptly uncovered several dozens of instances of improper use.  David Kravets at Ars Technica has the story here.  Example: a policeman, on behalf of a friend who suspected his wife of having an affair, provided information to enable the friend to find and stalk the wife's suspected lover.  Or how about this:

[A] female hospital employee spoke with a DPD officer who was at the hospital to investigate a reported sexual assault. The female employee was not involved in the investigation, but the officer made ‘‘small talk’’ with her after his interview of the sexual assault victim. At the end of her shift, the female employee returned home and found a voicemail message from the officer on her personal phone. She had not given the officer her phone number, and was upset that he had obtained it. . . .  During an investigation into the incident, records revealed that the officer had, in fact, used the NCIC/CCIC database (and other DPD databases) to obtain her phone number. . . .

If you're wondering why you don't read about this kind of thing very often, Kravets points out that this review was only conducted in response to a series of specific complaints, and that there is no ongoing routine monitoring of police use of the databases.  Oh, and no police officer who committed misconduct was fired or received any cut in pay or any other meaningful punishment; the worst was a "reprimand."  Hey, the cops are the good guys!  Why should we worry about them doing anything wrong?  I mean, it's not like some government bureaucracy (like say, the IRS) might ever use this accumulating government information to disadvantage political opponents of those in power.  Right?

UPDATE, March 19:  Jeb Kinnison has a post that reminds us of what has to be the largest government corruption of all time, namely the fake prosecutions of banks for alleged wrongdoing in connection with the recent financial crisis -- raising in excess of $100 billion outside of the congressional appropriation process -- and the use of much of those proceeds to give to organizations supportive of the government's side of the political divide.  La Raza, National Urban League, National Community Reinvestment Coalition, Neighbor Works America, etc., etc., etc.  He doesn't have a precise figure for how much of the $100+ biillion went to such organizations, but even if it's a relatively small fraction, it could easily equal or exceed all actual bribery that has occurred since our Republic was founded.  All administered by the Department of "Justice," of course -- the very people who get to decide who gets prosecuted for what in this country.  Don't worry, they won't be.