Author Archive | Todd Zywicki
The WSJ has an article today on how President Obama could have “parsed” his words better when it came to his claim that if you like your health insurance, you can keep it.
But the WSJ article seems awfully credulous about the supposed “parsing” that the Administration’s spinmeisters are putting on it. Apparently, what the President should have said, is that you can keep your plan if it is not substandard or “shoddy.” The canceled policies “aren’t even insurance” some have scoffed.
Richard Kirsch, the former national campaign manager of Health Care for America Now, which pushed for the 2010 health law, said the words were reassuring—and true—for the vast majority of the people, and so his group never raised concerns about that claim. Adding an asterisk to note that people who had “shoddy insurance” might need to change plans was not practical, he said.
“The actual, accurate statement is if you have good insurance, and you like it, you can keep it,” said Mr. Kirsch, now a senior fellow at the Roosevelt Institute, a liberal policy organization.
Leave aside the claim that it was “not practical” for the President to tell the truth. One Obama official quoted in the article gives up the game when he admits that President Obama easily could have told the truth–you can “probably” keep your insurance or “most people can keep their insurance”–but simply chose not to because telling the truth would have hurt him politically: “The former official added that in the midst of a hard-fought political debate ‘if you like your plan, you can probably keep it’ isn’t a salable point.” Quite a confession.
Focus instead on the purported clarification that what was omitted was that only those with “shoddy insurance” might lose their plans.
But that’s not actually true [...]
I sat down yesterday with Ryan Young of the Competitive Enterprise Institute on my recent paper, “The Consumer Financial Protection Bureau: Savior or Menace?” You can listen here. It is about 15 minutes. [...]
I’m the coauthor on a brand new paper just released today by the Ottawa-based Macdonald-Laurier Institute, “Credit Where It’s Due: How Payment Cards benefit Canadian merchants and consumers, and how regulation can harm them.” The report is co-authored The report is co-authored by myself, Ian Lee, Geoffrey A. Manne, and Julian Morris.
News has been trickling out over the past few weeks about the extraordinary data-mining operations that Randy noted awhile back. At least when the NSA snoops it is doing so to prevent terrorism (which, I hasten to add, doesn’t mean that it should be allowed to do so). It isn’t clear why the CFPB needs to be so intrusive.
Michael Mayfield and John Berlau have an update on the CFPB’s data-mining operations here. As for the financial privacy laws, they report that the CFPB is exempt from standard financial privacy laws:
How did we come to this? The main reason is that Dodd-Frank specifically exempts the CFPB from a bipartisan law enacted in the 1970s to protect Americans’ financial privacy.
In 1976, the U.S. Supreme Court ruled in U.S. v. Miller that the Fourth Amendment to the Constitution, which protects Americans from unreasonable searches and seizures, does not safeguard individuals’ financial information held by banks and other third-party institutions. In response to this ruling, Congress passed the Right to Financial Privacy Act (RFPA) in 1978. The law protects individuals’ financial privacy by requiring that federal agencies document their access to financial records. Under the RFPA, an agency that wishes to access a person’s financial information must first notify that person and give her an opportunity to object. If she objects, the agency is barred from accessing her records unless it formally certifies that they relate to a legitimate law enforcement investigation.
How can the CFPB get away with its data mining without violating the RFPA? Because Congress made the CFPB exempt from the RFPA when it enacted Dodd-Frank!
Fortunately, Rep. Duffy and a few other concerned lawmakers are fighting back. Duffy, a member of the House Financial Services Committee, recently introduced the Right to Financial Privacy Act of
I’ve frequently expressed concern that the legacy of Dodd-Frank will be to promote artificial consolidation of the banking industry by driving small banks out of business and making large banks even more “Too Big to Fail.” This is for two reasons.
The first reason would be if Dodd-Frank perpetuates the so-called TBTF subsidy. This is the idea that being designated too big to fail creates an implicit government guarantee for creditors that permits large banks to access capital markets more cheaply than non-TBTF banks. Whether there is a continued subsidy, and if so, how large, seems to be still somewhat undetermined at this point. The Huffington Post had a recent article that summarizes the debate on this point. Suffice to say, there may be a subsidy–if so, it would promote consolidation.
The second, and the one that prompts this post, is the regulatory tax imposed by Dodd-Frank and other new regulations. It has long been recognized that there are certain types of regulations for which the costs are somewhat invariant to size. Such regulations fall proportionally more heavily on small firms in an industry than large firms.
Small banks claim that this is the case with much of Dodd-Frank–and unlike the TBTF subsidy, this assertion seems largely uncontested to me. Here’s an article reporting on recent comments by Fed Governor Jerome Powell acknowledging that point.
And here’s an article that summarizes the views of one community banker:
Many bankers in charge of small banks say the deck is stacked against them. Regulation is a common adversary; small banks say they feel the costs of compliance with banking regulations more keenly than giant banks with well-funded staff.
John Buhrmaster, President of First National Bank in Scotia, NY says that it’s surprising that any really small banks actually make it. First
A couple of weeks ago I posted on an exchange between George Leef and Joshua Silverstein on the wisdom of grade inflation in law school.
I’m returning to my old stomping grounds of Mississippi this week, where I spent two wonderful years last century (1996-1998).
On Thursday, I will be at Mississippi College School of Law speaking on “The Financial Crisis and the Rule of Law.” My old friend and colleague Matt Steffey will provide commentary on my remarks. That will be Thursday, October 10 at noon in Room 150 of the law school.
On Friday, I will be at Mississippi State University to deliver the Jack R. Lee Chair of Financial Institutions and Consumer Finance Lecture on “Is the Consumer Financial Protection Bureau Good for Consumers?” That will be Friday, October 11, from 1:30-3:00 in McCool room 126 with a reception to follow in the McCool Atrium. [...]
The only problem? The experts at Cardhub.com have reviewed the card and aren’t all that impressed. The card turns out to be much more expensive, more fee-laden, and less functional than many of the cards already on the market offered by companies such as Chase, American Express/WalMart, Greendot, and PNC. Also, it turns out that some of their claims are, um, not completely accurate (also ironic, of course). They observe:
- People who are unbanked, underbanked, and even just angry-banked will all benefit from using the Card because it is a better and more affordable product.”
- False: There are better alternatives for every major type of prepaid card use.
- The Occupy Card has a host of mobile apps and other services including mobile deposit capture of checks.
- TBD: “These features are alluded to on OMC’s website, but there is no more proof of their existence than that.”
- “We won’t have to answer to Wall Street or to profit-hungry directors.”
- False: It’s simply hard to make the case that a financial services company that has deals with Visa and offers its card “through a bank” is somehow immune to contemporary corporate culture.
As Cardhub.com CEO Odysseas Papadimitriou concludes:
We can expect this product to struggle not only because of an inability to compete with other recent high-profile additions to the prepaid card market, both in terms of price and functionality, but also because the ‘Occupy’ moniker will likely turn off many mainstream consumers, while the card’s ties to large financial services companies alienate the social movement’s base.
In other words, it appears that if you are actually a [...]
So I’ve spent the past week in Warsaw, Poland, attending the European Law and Economics Association meetings and visiting the city. Although my family is Polish I’ve never visited the country. Perhaps my most distinct impression is how surprised I am at how middle class and prosperous the country seems, just 25 years removed from Communism. Walking the streets, the city superficially seems indistinguishable from any other major European city–except cheaper. (I didn’t get out of Warsaw at all, so maybe it is different in the countryside?).
And, my goodness, the food has been delectable. They actually have a dish that is meat-stuffed pierogi with a “gravy” of sauteed bacon bits. We need that back home. And last night I had the tastiest (and biggest) duck ever for dinner.
The Warsaw Uprising Museum is one of the most compelling historical museums I’ve ever seen. What a story. I was only vaguely familiar with it before visiting the museum, but what a compelling story. And the museum has some remarkable artifacts–Claire and I especially liked the newsreels made by the Home Army Propaganda Films unit. Quite fascinating. It is truly hard for me to imagine what it would be like to rise up against the Nazis only to hope that your Soviet “allies” will help–but then have the Soviets turn their back because refusing to intervene would make the city weaker for when the Soviets finally rolled in. What an era of evil. I also didn’t realize the extent to which Hitler utterly leveled the city in retribution for the Uprising. What an extraordinary story.
The rest of the historical sights were really great too, but the Uprising Museum is the one that is really going to stick with both of us for a long time. Unfortunately, we didn’t make it [...]
So apparently liberals don’t like Ted Cruz (nor do establishment Republicans either from what I read). But I think one of the more amusing things I’ve read so far is this one by Josh Marshall, who admits that he doesn’t really remember Ted but his wife does and–here’s his big news hook–all of Josh Marshall’s friends thought Ted was an ”Unbelievable A#*hole.” To which he adds:
Over the last few months I did some poking around too in Ted’s last past his late 20s. Unlike his college and law school years when I had tons of mutual acquaintances I could go to, here I had fewer. But the gist was the same.
And this is why I’ve been saying since Ted Cruz replaced Michele Bachmann as the King of the Tea Partiers that the reaction to Cruz in the senate is simply the reaction Ted’s gotten at least at every stage of his life since he arrived at college in 1988. An incredibly bright guy who’s an arrogant jerk who basically everybody ends up hating.
So a poll of Josh Marshall’s friends finds that “basically everybody” ends up hating Ted.
I didn’t know Ted until I succeeded him at the FTC 10 years ago so I can’t speak to his earlier life, but I know him and I know a lot of other people who actually know him… but somehow I’m guessing that Mr. Marshall didn’t actually speak to any of Ted’s friends when he wrote his little article? As far as I can tell, neither did Jason Zengerle when he wrote his article for GQ. It wouldn’t have been too difficult to find some people who, you know, are actually friends with Ted. Or maybe it was.
Obviously Ted doesn’t need anyone to defend him, and that’s [...]
I’m doing an essay for the George Mason Journal of Law, Economics, and Politics and one of the issues I will touch on is Robert Bork’s time teaching at GMU. First, I’m trying to establish when he taught at GMU. I have it that his last year was 1991-92 but I’m not sure how long he was there. Also, if anyone recalls taking any other class or other interactions with Professor Bork during that time. I’d appreciate it if you could post in the Comments or drop me an email. Thanks! [...]
From The Atlantic–better customer service and lower prices (for many) than banks:
As part of my research as an urban policy professor at The New School, I recently spent four months working weekly, eight-hour shifts as a teller at RiteCheck, a check cashing business in the Mott Haven neighborhood of the South Bronx. I wanted to understand how and why the people who frequent these “alternative” financial institutions use them. Like the majority of my academic colleagues, I believed check cashers, with their per transaction fee structure, and payday lenders, preyed upon the unbanked. But I learned quickly that many RiteCheck customers have made a conscious choice to be unbanked.
In my research, I’ve been struck by the number of people who say that they choose to go without bank accounts now because of negative experiences with banks and bank accounts. [...]
I’ve just started reading John Lott’s new book Dumbing Down the Courts: How Politics Keeps the Smartest Judges Off the Bench and this review caught my eye because it discusses one of my law school professors, Lillian BeVier, who was nominated for the 4th Circuit back when I was in law school at UVA. [...]