Links 2024-05-04 - Too Many Secrets
It seems that soon we will literally have nothing to hide.
“What are you worried about if you have nothing to hide?” That is a common and pathetic retort by those apologizing for intrusive government interloping.
At some point we’ll have to stop calling it anything other than forced, complete transparency. It is not spying, eavesdropping, surveillance, snooping, et al. if it is so plainly in the open.
While this post considers only financial transactions, this impacts us all—I’ll leave the Scots’ foray into social/moral “wrong think” as well as the never-ending search to discover which of us is a terrorist by listening, recording, and reading all our “private/personal” correspondence for another day. There is a reason that to catch thieves investigators are told to “follow the money.” But the existence of thieves does not mean we all deserve to have our money followed. And by following the money, an investigator can uncover knowledge about basically everything else—hence, the usefulness behind the adage.
Let’s begin with Brent Skorup, Anastasia P. Boden, and Jennifer J. Schulp writing about the SEC’s consolidated audit trail (CAT) system.
Normally, the government cannot access that information, absent a manual process such as issuing a subpoena, obtaining a search warrant, or making a formal, emailed request to a company for customer information. The Securities and Exchange Commission’s (SEC) consolidated audit trail (CAT) system threatens to change all of that by both collecting data on every stock and options trade made in the United States and personally identifying information of the individual who made the trade. The CAT system gives government agencies a blueprint for pervasive and constant government surveillance:
1) it requires regulated parties to collect data daily and retain immense amounts of sensitive information about their customers;
2) it offers no chance to opt out; and
3) it demands unfettered access to customers’ data on the theory that the government might need the information for future law enforcement.
The founding fathers knew that it was dangerous, not just illegitimate but truly dangerous, for the state to have unfettered access to personal information. Sadly it seems with each technological advancement we are forced to learn this lesson over and over again.
For those who would prefer to hear a brief podcast version, I direct you to this Cato Daily Podcast with Jennifer Schulp as well as this episode where she outlines a reform agenda.
Next is Alex Tabarrok lamenting the erosion of financial privacy.
Privacy suffers from a collective action dilemma: individually it isn’t worth much and so we don’t defend it, but lack of privacy is immensely costly when lost en masse. Moreover, our data, en masse, is worth a lot to corporations and governments. Thus privacy has few defenders and strong attackers.
Circling back to the concern that losing financial privacy is of the upmost concern, Norbert Michel compares the BSA to FISA arguing that the former is a bigger threat to liberty than the latter.
Section 702 authorizes the government to conduct (without a warrant) targeted surveillance of foreign persons located outside the United States. A potential problem is that the government risks catching U.S. citizens in a net of warrantless surveillance if the targeted foreign person communicates with an American.
It turns out the federal government has conducted tons of these warrantless searches—more than 200,000 in 2022 alone—of Americans’ phone calls, emails, and texts. As Rep. Andy Biggs (R‑AZ) noted, the FBI “improperly searched 19,000 donors to a congressional candidate, Americans on both sides of the aisle attending political protests, journalists and political commentators, Members of Congress, other government officials, and more.”
However . . .
The BSA is an even bigger threat to the Fourth Amendment. Americans do not have to communicate with a foreign person or suspected terrorist to be wrapped up in BSA surveillance. People get wrapped up in BSA surveillance for simply spending their own money.
…
The BSA and the massive federal anti‐money laundering framework that it spawned gives the government warrantless access to the financial records of any American with a bank account.
But what am I so worked up about assuming I have nothing to hide?