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OpenMarket: John Berlau

  • The HSA Revolution That's Already Here

    July 26, 2008
    The new book America's Health Care Crisis Solved has been praised as providing a detailed, free-market solution for healthcare's future. This it does, but what's almost as fascinating about the book is its description of what is going on in the present, with consumer-driven health savings accounts (HSAs). Almost without notice, HSAs have grown dramatically and have solved for millions of Americans the problem of healthcare's lack of portability.

    First, some background. In the 2003 law that was rightly derided for massively expanding Medicare with a new prescription drug benefit was a separate section that let many more working-age people to take advantage of HSAs. This provision allowed any adult under 65 to open a savings account for...
  • 'Kelo' Property Rights Protections gutted from housing bill (revised and corrected)

    July 24, 2008
    Of all the unintended consequences of the housing bill that passed the House yesterday -- of which there will likely be many -- one of the most ironic and far-reaching may be this: that whatever security marginal homewoners have from foreclosures, their homes will be far less safe from being taken by a bureaucrat through eminent domain.

    That's because the bill unveiled this week -- as the result of negotiations between House Financial Services Committee Chairman Barney Frank and Treasury Secretary Hank Paulson -- takes specific language protecting property rights from the housing bill that most recently passed the Senate and renders it almost meaningless. As a result, the billions of dollar in new grants the bill provides for "the production, preservation and rehabilitation" of housing units, could stimulate a bonanza of state and local property confiscation of the type green-lighted...
  • GSE Bailout Contains Fingerprint Registry!!

    July 23, 2008
    While pretty steep, $25 billion of our tax dollars isn't the only thing many Americans could lose in the just-unveiled GSE bailout bill likely being voted on later today in the House of Representatives. They could lose valuable liberities as well. Despite opposition from a bipartisan coalition including the American Civil Liberties Union and the American Conservative Union, the bill just now being e-mailed around House offices includes the Senate bill's mandatory fingerprint registry. Legions of ordinary Americans working in the banking, mortgage and real estate industries would have to send their fingerprints to the feds for continuous "tracking."

    In language virtually indentical to that in the Senate bill that passed earlier this month, the House bill -- which...
  • Fingerprint registry in Senate housing bill -- Battle moves to House

    July 18, 2008
    It is in times of national emergencies that measures infringing on privacy and civil liberties are advocated -- and sometimes rushed through without even being discussed -- even if they turn out to do little to solve the problem at hand. Then, when the emergency is over, the liberty-stealing measures remain.

    The current crisis at Fannie Mae, Freddie Mac and banks is being characterized as a national emergency, and not surprisingly, political leaders are demanding that war-like financial measures be enacted. But we can't let the rationale of a financial crisis bring on unwarranted intrusion on our liberties any more than we can let the justification of national security do so.

    Last Friday, despite the best efforts a bipartisan coalition including the American Civil Liberties Union and the American Conservative Union, the Senate passed...
  • Fannie-Freddie warnings from Fred Smith in 2000 and beyond

    July 14, 2008
    The near-collapse of Fannie Mae and Freddie Mac may have taken the markets and the financial media by surprise, but is something that CEI schlolars have been warning about for more than a decade.

    In testimony in 2000 before the U.S. House of Representatives, CEI President Fred Smith issued this caution on the two government-sponsored enterprises: "Privatizing the profit side of the ledger while socializing the loss side is a sure-fire recipe for disaster. It was exactly that problem that so exacerbated the plight of the S&Ls in the '90s."

    Smith warned of the "moral hazard" of Fannie and Freddie's implicit and explicit government subisidies. In words that sound prescient today, he said: "These institutions hold a much larger portfolio of housing-related financial instruments (and a more concentrated form of assets) than did any S&Ls in...
  • Fingerprint Registry goes to Senate Floor -- likely today

    June 18, 2008
    In the past few days, the subprime mess has morphed into a Congressional ethics scandal. Portfolio magazine has revealed that Senate Banking Comittee Chairman Chris Dodd, D-Conn., and Sen. Kent Conrad- D-N.D., as well as former Bush administration Secretary of Housing and Urban Development Alphonso Jackson, received special "VIP" loans from embattled mortgage lender Countrywide Financial. Compared with loans for ordinary folk, these special mortgages may have allowed the "VIPs" to pocket thousands of dollars in savings. And they raise questions as to whether Countrywide was trying to influence these officials with improper and/or illegal gifts.

    Given all the housing troubles, you would think this would call for an investigation. But policing itself is not what Congress has in mind when...
  • An Untrustworthy Housing Fund -- Housing bill has likely ACORN slush Fund

    June 16, 2008
    It's almost a Washington truism that anytime Congress creates a "trust fund" for a certain policy issue, the money flowing into this "trust fund" will be diverted to something else. Government "trust funds" are set up with special taxes and fees so that they will be less subject to normal budget constraints -- but this makes them all the more desirable for future Congresses to divert their proceeds to spend on pork.

    Payroll tax money in the Social Security Trust Fund, for instance, has for decades been emptied out to fund general government programs. Similarly, the Highway Trust Fund set up to build and improve roads from the federal gasoline tax has also seen raids on its purse for other priorities.

    But the granddaddy of all phony government trust funds may be soon enacted in housing bailout legislation before Congress. The so-...
  • Geithner is wrong -- Expanding Fed's regulatory role would compromise core monetary function

    June 9, 2008
    The business media is abuzz about a speech and Financial Times op-ed today by Federal Reserve Bank of New York President Tim Geithner calling for more power for the Fed to regulate to prevent financial crises. What a news flash! A bureaucrat calls for more power for his own agency. The real man-bites-dog story would be a regulator calling for limiting his agency's power (which has, believe it or not, occasionaly happened. Civil Aerounatics Board head Alfred Kahn ushering airline deregulation under the Carter presidency is one excellent, but all-too-rare, example.)

    Some background. Geithner was the Fed official most responsible for putting together the deal to sell Bear Stearns to JP Morgan Chase and bail out Bear...
  • Fingerprint Registry in Housing Bill- Are Borrowers Next?

    May 30, 2008
    Last week, I discovered a bizarre requirement for a fingerprint registrty in housing legislation that had just passed the Senate Banking Committee. In an OpenMarket post last Friday, I wrote that the provison had "almost escape[d] without notice."

    I am now heartened to write that the database provision has now generated plenty of notice and interest. OpenMarket has gotten over 100,000 hits on this post, and, at last count, 375 concerned readers have posted comments. The post was linked to by the Drudge Report and by Reason magazine's popular blog, "Hit & Run." Also, over at CNET News, savvy tech writer Declan McCullagh dug up some interesting new info on the fingerprint provison in his own...
  • Fingerprint Registry in Housing Bill!!!

    May 23, 2008
    Author's note: See follow-up post "Are Borrowers Next?"

    Fingerprints are considered to be among the most personal of information, and fingerprint databases created and proposed in the name of national security have generated much debate. Recently, "Server in the Sky" -- a proposed international database of the fingerprints of suspected criminals and terrorists to be shared among the U.S., U.K. and Canada -- has ignited a firestorm of controversy. As have cavalier comments by Homeland Security Secretary Michael Chertoff that fingerprints aren't "personal data."

    Yet earlier this week...

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